For the prosecutor, Hood, Lafferty & Emerson (Sigurd A. Emerson, of counsel).
For the defendant Board of Review of the New Jersey Unemployment Compensation Commission, Clarence F. McGovern.
Before Brogan, Chief Justice, and Justices Case and Heher.
The opinion of the court was delivered by
HEHER, J. The defendant Galde was employed as a canvasser and salesman by the defendant DiPerna, a "distributor" of prosecutor's manufactures, new and second-hand; and the point of controversy is whether Galde is eligible for unemployment compensation benefits under R.S. 1937, 43:21-1, et seq.
Concededly DiPerna was not an "employer" within the definition incorporated in section 43:21-19 (h). The Board
of Review ruled that he was "a contractor for or agent of" prosecutor, an "employing unit" subject to the act, and therefore prosecutor is to be deemed the employer of Galde for the purposes of the act; and that, moreover, DiPerna was also an "agent" and "employee" of prosecutor within the purview of section 43:21-19 (g). It was found that prosecutor had "actual or constructive knowledge of the work," the statutory sine qua non as respects these latter classifications.
Under the distributor's contract with prosecutor, the goods were shipped to him on consignment for "sale and lease" at prices and on terms fixed by prosecutor, in territory assigned to him. He was at liberty to return unsold merchandise. He dealt only in prosecutor's products. For his services, he was paid a specified "selling commission" and a "collecting commission" on accounts entrusted to him for collection. There were provisions for the taking of second-hand machines and equipment "in trade." Prosecutor fixed the maximum allowance for such; and the contract contained an adjustment formula for use where the allowance in a given case was greater or less. Unlike the merchandise consigned to the distributor for sale, machines taken in trade were the latter's property. The installment contracts were made directly between the prosecutor and the vendee. The distributor's place of business was established in the contract; and he undertook to pay "from his own funds all of the expenses incurred by him incidental to the carrying on of business;" under the contract, "and the compensation of any agent or employee of his, and not to incur any such expenses or obligations therefor in the name of or on behalf of the Company in any respect or to pledge the credit or use the funds of the Company for any such purpose;" to "exercise all due and reasonable care for the protection and preservation" of the property so consigned to him; to "repossess and recover for and deliver to the Company any such property sold or leased when repossession is authorized and desired by the Company;" and to "ascertain for the Company and to inform the Company" of the location of goods "on which full payment on the sale or lease" thereof had not been made. Thus, the distributor hired, compensated, supervised and controlled all
the employees of his business, and defrayed the cost of maintaining the premises needed for that purpose and of carrying liability and workmen's compensation insurance. The contract was terminable at the pleasure of either party. The distributor had borne this relationship to prosecutor for many years, and had been engaged in business at the place fixed in the contract for a period of nine years. About 65% of his income was derived from the sale of new machines on prosecutor's account, and 35% from the sale of rebuilt second-hand machines and parts and repair charges.
First: It is affirmed that the claimant cannot be deemed an "employee" of prosecutor within the intendment of subsection 19 (g), supra, since the distributor's contract is not one "for any employment," and therefore the ...