Home Indemnity Co. v. Hernlen ( 1959 )

On Motion for Rehearing

In a motion for a rehearing filed in this court, counsel for the plaintiff in error makes the contention that John P. Hemlen, the claimant, cannot be both the employer and the employee at one and the same time. In making this contention, counsel overlooks the fact that while Hemlen was in fact one of the trastees of his father’s estate that as such he managed the estate merely in a representative capacity. Under the facts shown in the record he had no beneficial interest in the estate since the profits derived from the operation of the business were designated by his father to be for the benefit of his mother. While this court recognizes that in ordinary partnerships the partnership is not a separate or distinct entity from the persons comprising the partnership, yet, nevertheless, we think that under a careful consideraation of the general principles respecting trust estates and the respective liabilities and rights of trustees and the beneficiaries of such trust estates there is a distinct difference in entities between the estate itself and the individual persons who are the trustees of the estate. The employer in this-case was the trust estate as represented by the two trustees and not the trustees themselves as individuals. The trustees, insofar as they were employers, were so only in their representative capacity.

The analogy would not be strained to compare the case here made with a case supposed, where the creator of the trust had, instead of making merely his two sons trustees of the estate, constituted all of the employees of his business as a board of trustees to operate and continue the business for the benefit of his widow. Under such a circumstance, it cannot be said that the employees would all thus become individúally partners in the operation of the business so that they could no longer continue to be employees of the business within the meaning of the Workmen’s Compensation Act. Under the facts appearing in the instant case, the creator of the trust knew that his sons were employees of his business, and we think it may be fairly inferred that-he intended that they would continue as such while acting as trustees in a fiduciary or representative capacity to operate the business. Thus, the trustees here acted in their representative capacity in managing the business for the benefit of their mother and in their individual capacity as employees of the business.

No question is presented by the record in this workmen’s compensation case as to the propriety or impropriety of this kind of “self-dealing.” See, however, in this connection 90 C. J. S. 255, n. 34, Trusts, § 248.

Motion for rehearing denied.