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Goldberg v. Division of Employment Security

Decided: March 5, 1956.

WILLIAM H. GOLDBERG & CO., INC., A NEW JERSEY CORPORATION, PETITIONER-APPELLANT,
v.
DIVISION OF EMPLOYMENT SECURITY, DEPARTMENT OF LABOR AND INDUSTRY, STATE OF NEW JERSEY, RESPONDENT-RESPONDENT



On appeal from a decision of the Commissioner of the Department of Labor and Industry.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling, Jacobs and Brennan. For reversal -- None. The opinion of the court was delivered by Oliphant, J.

Oliphant

This is an appeal from a determination of the Commissioner of Labor and Industry affirming a finding by the Division of Employment Security imposing liability on the appellant-corporation, William H. Goldberg & Co., Inc., for unemployment compensation taxes upon commissions paid to an insurance solicitor, one Perschelli, from the first quarter of 1949 through the second quarter of 1952. We certified the case on our own motion, R.R. 1:10-1(a).

The appellant is engaged in the insurance and real estate business in Trenton, New Jersey. It is licensed as an insurance agent by the Department of Banking and Insurance pursuant to N.J.S.A. 17:22-6.1 by which an insurance agent is defined as:

"An insurance agent is hereby defined to be an individual, a resident of this State or whose principal office for the conduct of his insurance business is in this State, authorized in writing by any insurance company lawfully authorized to transact business in this State, to act as its agent, with authority to solicit, negotiate and effect contracts of insurance in its behalf, to collect the premiums thereon, and who has a bona fide office in this State in which is kept a record of the contracts of insurance countersigned or issued by him."

Perschelli was employed as an insurance solicitor for Goldberg from January 1, 1949 to June 30, 1952. He likewise was licensed by the Department of Banking and Insurance

as a solicitor and an insurance solicitor is defined by N.J.S.A. 17:22-6.3 as follows:

"An insurance solicitor is hereby defined to be an individual, employed and authorized by a duly licensed insurance agent or broker to solicit and negotiate contracts of insurance solely on behalf of such agent or broker."

During the period from January 1, 1949 to June 30, 1952 Perschelli did not have an insurance agent's license. The modus operandi as found by the Commissioner of Labor was that Perschelli solicited applications for insurance and presented them to the appellant's office for acceptance. In some cases the application would be passed on by the appellant and in others by the insurance companies represented by the appellant as agent. He received all his cards and literature from the appellant and was paid commissions each week, and during the period from January 1, 1949 to June 30, 1952 his commissions as a solicitor amounted to $12,220. These commissions were carried on appellant's payroll book and it withheld the federal income tax and submitted the required W-2 forms and made all the deductions for social security purposes. The appellant paid no expenses in connection with Perschelli's solicitation of business and Perschelli was not subject to any work schedule or orders and could solicit insurance business as and when he desired.

The Commissioner found Perschelli carried on under an insurance solicitor's license made out to and for the appellant and therefore it could not be maintained that he was an insurance agent for any insurance company but he was simply a soliciting agent for the appellant and he could not write any insurance for and on his own account. We are generally in accord with these conclusions.

The issue presented on this appeal is whether Perschelli's service with the appellant was "employment" within the meaning of N.J.S.A. 43:21-19(i) which, inter alia, provides:

"(i)(1) 'Employment' means service, including service in interstate commerce performed for remuneration or under any contract of hire, ...


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