On appeal from the Division of Employment Security.
For reversal -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For affirmance -- None. The opinion of the court was delivered by Wachenfeld, J.
This is an appeal from a final determination of the Division of Employment Security in the State Department of Labor and Industry, which affirmed the decision of the Director holding that appellant is an employer subject to the provisions of the Unemployment Compensation Law, N.J.S.A. 43:21-1 et seq. We certified the appeal on our own motion while pending in the Appellate Division.
The appellant, Fuller Tool & Die Co., is a partnership engaged in the business of operating a machine shop. The partnership comprises three individuals, August Hattersley
and his two sons Harold and Roy, and was formed on January 1, 1953 as the successor to August Hattersley, who had, since February 15, 1950, operated the business as an individual proprietorship.
At no time since February 15, 1950 has August Hattersley, or the successor partnership, had in its employment four or more individuals for a period of 20 weeks so as to be constituted an employer under subparagraph (1) of N.J.S.A. 43:21-19(h). The Division held, however, that the partnership was an "employer" subject to the act since August Hattersley, its predecessor, had on February 15, 1950 acquired the organization, trade or business, or substantially all of the assets, of William Tobia and Angelo Coccaro, t/a Fuller Tool & Manufacturing Co., an employer subject to the Unemployment Compensation Act. This holding was bottomed on subparagraph (2) of N.J.S.A. 43:21-19(h), which provides:
"(h) 'Employer' means: * * *
(2) Any employing unit which acquired the organization, trade or business, or substantially all the assets thereof, of another which at the time of such acquisition was an employer subject to this chapter; * * *."
The findings of fact are not disputed and may be briefly summarized as follows. For many years prior to 1950, August Hattersley had been employed as a tool maker and factory superintendent for an engineering company and had never been an employing unit or an employer under the New Jersey Unemployment Compensation Law. As a result of a change of ownership of the company by which he was employed, Hattersley lost his job.
Rather than find new employment, which at his age was difficult, he decided to go into business for himself. With capital which he had saved from his prior employment, on February 15, 1950 he purchased the machinery of a tool and die shop which was then owned by the partnership of William Tobia and Angelo Coccaro, t/a Fuller Tool & Manufacturing Co.
At the time of such acquisition, Tobia and Coccaro were registered as an employer with the Division of Employment Security and were subject to the provisions of the New Jersey Unemployment Compensation Law. However, the machine shop which they operated was idle for lack of orders and their lease of the premises in which the shop was located had expired. The bill of sale listed, in a separate schedule, the equipment which Hattersley purchased from Tobia and Coccaro. It consisted of a number of lathes, drill presses and accessory machines and devices, together with certain items of office equipment, including a desk and chair, filing cabinet and typewriter. The bill of sale also recited a covenant on the part of the sellers that they would not ...