## Facts

- Excel Associates, a limited partnership, owned an apartment building; its corporate general partner was Tribute Music, Inc.
- Edward Chalpin was both a limited partner in Excel and a director/officer of Tribute.
- Chalpin personally hired Bernabe Gonzalez as superintendent/maintenance worker, with salary and a rent-free apartment, and requested substantial renovation work.
- Chalpin negotiated directly with Gonzalez and did not clearly disclose that he was acting only for Tribute or Excel.
- Payments for the work were made by checks signed “Edward Chalpin,” without clear indication of a representative capacity.
- Gonzalez was only partially paid and sued to recover unpaid compensation for renovation services, naming both Excel and Chalpin.

## Issues

1. Whether Chalpin could avoid personal contract liability by claiming he acted solely as an officer/director of the corporate general partner or as a limited partner of the limited partnership.
2. Whether Chalpin’s direct dealings in his own name, without clear disclosure of an agency relationship, made him personally liable for the unpaid compensation.

## Decision

- The New York Court of Appeals affirmed the judgment holding Chalpin personally liable.
- The court concluded that Chalpin’s conduct—direct negotiation, hiring, and payment in his own name without clear disclosure of a principal—supported Gonzalez’s reasonable belief that Chalpin was personally obligated.
- The court held that a limited partner who also acts as an officer of the corporate general partner bears a heavy burden to show he acted only in a representative capacity when his conduct suggested personal commitment.

## Legal Principles

- An individual who contracts or conducts business in his own name may be personally liable if he fails to clearly disclose that he is acting solely as an agent for a disclosed principal.
- In a limited partnership structure with a corporate general partner, an individual serving in dual roles (limited partner and corporate officer/director) is not insulated from personal liability when his outward conduct reasonably indicates a personal undertaking.
- The risk of non-disclosure of the true principal falls on the person who knows the entity structure and controls the dealings, not on the third party who is not informed of the representative capacity.

## Conclusion

The court affirmed personal liability because Chalpin dealt with the worker in a manner that reasonably appeared personal and did not clearly identify a disclosed principal or his representative capacity, and his dual status as limited partner and corporate officer did not shield him from that result.


Gonzalez v. Chalpin, 77 N.Y.2d 74, 565 N.E.2d 1253 (1990)