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Alexander Hamilton Hotel Corp. v. Board of Review of New Jersey Unemployment Compensation Commission

Decided: September 16, 1941.


On certiorari.

For the prosecutor, Merrey & Merrey (Edward F. Merrey, Jr., of counsel).

For the defendants, Clarence F. McGovern.

Before Justices Case, Donges and Heher.


The opinion of the court was delivered by

HEHER, J. The essential question for decision is whether, in the fixation of unemployment compensation benefits under R.S. 1937, 43:21-1, et seq., "tips" given directly to the employee by the employer's patrons are to be considered as a component part of the employee's "wages," where the wages to be paid by the employer are established with reference to the quantum of the "tips" normally received in such employment.

The employer here is the operator of the Alexander Hamilton Hotel in the City of Paterson. On March 7th, 1939, it hired the defendant Mathiesen for service as a waiter in the hotel restaurant. The contract of service was reduced to writing. It provided for a "monthly wage of $33" and "two meals a day." While the writing makes no mention of gratuities, the employer's manager conceded that the monthly wage was settled thus "on the assumption of the hotel that the waiters be allowed to accept tips." The employee testified that the employer's headwaiter, who negotiated the contract, advised him that "the job would be good for at least $25 a week in tips and $33 a month wages," and his meals as well. He was likewise informed, so he said, that he would be obliged to "give the bus boy 10% of" his "tips." He was discharged on January 25th, 1940; and he thereupon made application for "benefits for total unemployment" under R.S. 1937, 43:21-3 and 43:21-4. It was stipulated that "claimant's Exhibits Nos. 1 and 2" consist of "two small books * * * in which the claimant asserted he kept a day by day record in his own handwriting of tips while he was in the employ of the * * * Hotel, and that entries" therein "indicate that during the claimant's base year" (1939) "he received as tips the sum of $66.15 during the first quarter * * *, the sum of $373.43 * * * during the second quarter * * *, and the sum of $406.35 * * * during the third quarter * * *."

The Board of Review found that "both the employer and the claimant contemplated, at the time of entering into the employer-employee relationship, that the claimant would receive tips;" that "the expectation of tips was one of the

important inducements which led the claimant to accept the employment;" that the claimant "earned * * * tips" in the stated sums "during his base year;" that "tips are payments made for personal services;" that here "the remuneration received by the claimant directly from the employer was so small that the claimant would not have accepted the work had it not been for the possibility of increasing his earnings through the receipt of tips;" that both parties "contemplated the tips which would be received from customers as a part of the earnings resulting from the employment;" that, "while the tips were not paid directly by the employer, they were a part of the remuneration resulting from the employment furnished by" the employer; that the employer "was able to reduce the amount of remuneration directly payable by it because of the fact that, out of the employment which it provided, the claimant was enabled to receive additional compensation in the form of tips, which compensation was necessary in order to induce the claimant to accept the employment," and, "since the employer," under section 43:21-7 (d) (2) of the act, "was liable in the first instance for contributions with respect thereto," and the parties adjusted "the wage scale in direct proportion to the amount of tips expected, the tips must be regarded as a part of the remuneration for employment and not as mere gratuities;" hence, such income is an essential part of the employee's remuneration upon which the statutory benefits are based.

This is a misapprehension of the statute. We are enjoined to interpret and apply this enactment in accordance with the expressed legislative will, rather than some supposed unexpressed intention -- even though, in the view of the interpretative authority, that would be more in consonance with reason and justice. Where the terms employed to declare the legislative purpose are clear and precise, and are not of doubtful meaning, there is no room for construction. The judicial function is to enforce the revealed object as so delimited. It was one of Domat's rules of interpretation that "Laws ought to be written to the end that the writing may fix the sense of the law, and determine the mind to conceive a just idea of that which is established by the law, and that it be not

left free for every one to frame the law as he himself is pleased to understand it." 1 Cushing's Ed. 108. Of course, the rules laying it down that the intention may be gleaned from other acts in pari materia, and that that which is implied in a statute is as much a part of it as what is expressed, serve only to take cognizance of the disclosed intention of the lawgiver. And legislative enactments should be interpreted according to the natural, obvious and ordinary import of the words used as tokens of intention. When the terms are explicit, they are presumed to express the full intention of the lawmaker. This is a primary canon governing the exposition of a statute. Plain and unambiguous words not rendered dubious by the context cannot be controlled by judicial construction. "Liberal" construction does not connote a disregard of the plain meaning of the language employed to express the legislative object * * * an extension of the boundaries delineated by the terms as commonly used, unless the context clearly discloses a special usage. Fedi v. Ryan, 118 N.J.L. 516; U.S. Casualty ...

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