On appeal from the Hudson County Court certified by this court on its own motion.
For reversal -- Chief Justice Vanderbilt, and Justices Heher, Jacobs and Brennan. For affirmance -- Justices Oliphant, Wachenfeld and Burling. The opinion of the court was delivered by Vanderbilt, C.J.
[18 NJ Page 354] This is a workmen's compensation case in which the petitioner was a newsboy on the sidewalks of Jersey City. The respondent conducted a newsstand in Jersey City where the petitioner would report each evening and receive copies of the early edition of the next morning's New York Daily News and New York Daily Mirror. On the evening in question the respondent assigned the petitioner to the front of the State Theater, where the petitioner remained until the last performance had ended and then he proceeded to cross the street in order to sell the remaining
papers on the opposite corner. While crossing the street he was run down by an automobile. This action resulted in a dismissal of the petition by the Workmen's Compensation Division which, although finding that an employer-employee relationship existed, held that the petitioner as a newsboy was specifically barred from recovery under section 36 of the Workmen's Compensation Act, N.J.S.A. 34:15-36. On appeal the County Court affirmed for the same reason, 32 N.J. Super. 450, although also finding no employer-employee relationship, and we certified the appeal on our own motion prior to oral argument in the Appellate Division of the Superior Court.
The first question is whether the petitioner was an employee of the respondent at the time of the accident, the basic prerequisite for recovery under the act, N.J.S.A. 34:15-1 et seq. N.J.S.A. 34:15-36 defines "employer" as "synonymous with master, and includes natural persons, partnerships, and corporations," while "employee" is defined as "synonymous with servant, and includes all natural persons who perform service for another for financial consideration, exclusive of casual employments." The determinative factor as to whether a person is an employee or an independent contractor for the purposes of workmen's compensation is control; the relationship of master and servant exists whenever the employer retains the right to determine not only what shall be done, but how it shall be done, Wilson v. Kelleher Motor Freight Lines, Inc., 12 N.J. 261, 264 (1953); Cappadonna v. Passaic Motors, Inc., 136 N.J.L. 299 (Sup. Ct. 1947), affirmed 137 N.J.L. 661 (E. & A. 1948).
The respondent's position was that of supervisor for two newspaper companies:
"I am supervisor of all the News, Daily Newses, in this northern New Jersey. In other words, I work under the circulation and promotion.
It is my duty to see that circulation is carried out and papers are distributed."
Although it is not altogether clear, it appears that he was an independent contractor who had a franchise or exclusive
right from the two newspaper companies to distribute their papers in the Jersey City area. In any event, there is no contention that he acted as agent for the newspaper companies in hiring the newsboys. The newsboys, including the petitioner, would report to him and he would give each a specified number of newspapers to sell and would tell each the precise territory where he was to sell them. If the newspapers were to be sold at any distance from the respondent's newsstand his truck would drop the newspapers off and the newsboy would pick them up. The newsboys paid the respondent nothing for the papers and were told by him how much to charge for them. Then after they had completed their sales they returned to his newsstand and gave him all the money they had received, including their tips, and returned unsold papers to him. He would then determine what they were to receive, which was usually a penny for each newspaper sold. There was testimony by one newsboy that on Saturday nights they received "a straight four or five dollars."
It is quite apparent that the nature of the respondent's business was such that he exercised full control over all newsboys, even to the extent of telling them precisely where they were to stand and sell the papers. They paid nothing for the papers and had no choice as to the number they received, the price they were to charge, or where they were to sell them. There was testimony that on occasion the respondent would search their pockets to determine whether they were withholding any money from him. In El v. Newark Star-Ledger, 131 N.J.L. 373 (Sup. Ct. 1944), the court found that an employer-employee relationship existed between the newspaper company and a newsboy who delivered its papers, while in Crawford v. Newark Star Publishing Co., 15 N.J. Misc. 77 (Sup. Ct. 1936), the newspaper company admitted that a master-servant relationship existed with the petitioner who sold newspaper subscriptions. In Hearst ...