Summary
In Davie v. J.C. Mandelson Co. 90 N.H. 545, in construing an employment security statute similar to ours, in a per curiam opinion, it was held that a president of a business corporation whose duties were to preside at all meetings of the corporation and with the treasurer sign all stock certificates, for which she received no compensation, was not an employee under the statute.
Summary of this case from Bay State Harness Horse Racing & Breeding Ass'n v. Director of Division of Employment SecurityOpinion
No. 3126.
Decided March 5, 1940.
In determining the liability of a corporation for reports and contributions under the unemployment compensation act (Laws 1937, c. 178) a president of the corporation is not to be reckoned as one of its employees under s. 1, Pars. H (1) and I (1) where the services of such officer are gratuitous, of a formal nature, and required solely for the maintenance of the corporate organization and in no way connected with the conduct of its business.
Words and phrases are to be construed in accordance with the common and approved usage of the language employed unless they have acquired a "peculiar and appropriate meaning in law." P. L., c. 2, s. 2.
The word "employment" in Laws 1937, c. 178 does not include the services of a president gratuitously performing functions of only a formal character.
DEBT, by the Commissioner of Labor to recover the amount of contributions alleged to be due from the defendant under the provisions of the Unemployment Compensation Act, (Laws 1937, c. 178). Upon an agreed statement of facts the court ruled as a matter of law that the defendant was liable for contributions under the statute and found a verdict for the plaintiff in the sum of $300. To these orders the defendant excepted and its bill of exceptions was duly allowed by Johnston, J.
From the agreed statement the following facts appear:
"J. C. Mandelson Company was incorporated under the New Hampshire Laws in 1908 and carries on a retail gentlemen's clothing and furnishings store in Nashua. The officers are Mrs. J. C. Mandelson, President, and Mr. J. C. Mandelson, Treasurer and General Manager . . . . Mr. J. C. Mandelson, the bookkeeper, and one full time clerk are paid employees receiving a salary or wage . . . . The President, Mrs. J. C. Mandelson, receives no wages whatsoever and her duties are `to preside at all meetings of the corporation and sign with the Treasurer all certificates of stock which may be issued.'"
The court stated the question at issue and its ruling thereon as follows:
"The question at issue is whether Mrs. J. C. Mandelson as president of the corporation receiving no remuneration, is to be counted as an individual engaged in employment in determining the liability of this Corporation for reports and contributions under the New Hampshire Unemployment Compensation Law . . . . The Court rules that the president is an individual engaged in employment within the meaning of the statute under consideration. Verdict for the plaintiff in the sum of $300."
The applicable provisions of the statute are as follows:
"`Employer' means (1) Any employing unit which in each of twenty different weeks, whether or not such weeks are or were consecutive, within either the current or the preceding calendar year, has or had in employment, four or more individuals, irrespective of whether the same individuals are or were employed in each such week." Laws 1937, c. 178, s. 1, Par. H.
"`Employment' (1) subject to the other provisions of this subsection means service, including service in interstate commerce performed for wages or under any contract of hire, written or oral, expressed or implied." Ib., Par. I.
Thomas P. Cheney, Attorney-General, Frank R. Kenison, Assistant Attorney-General, and Walter A. Calderwood (Mr. Calderwood orally), for the plaintiff.
John R. Spring, for the defendant.
The statutory rules for the construction of statutes provide that "Words and phrases shall be construed according to the common and approved usage of the language," unless they have acquired a "peculiar and appropriate meaning in law." P. L. c. 2, s. 2. We do not think that the words "service . . . performed . . . under any contract of hire, written or oral, expressed or implied," construed according to "the common and approved usage of the language" describe the services gratuitously rendered by Mrs. Mandelson to the defendant. The acts performed by her as president of the corporation are of a purely ceremonial or formal nature required only for the maintenance of the corporate organization of the defendant and are in no way connected with the conduct of the business in which it is engaged. It has not been suggested that the words of the statute have acquired any "peculiar . . . meaning in law." We therefore hold that she is not a person in the "employment" of the defendant within the meaning of the statute, and since it appears from the agreed statement of facts that the defendant had in its employ during the period under consideration, only three persons rendering service for wages, it follows that the defendant is not legally bound to pay the contributions which the plaintiff seeks to recover in the present action.
In reaching this conclusion we have not ignored the rulings of administrative officers and boards in other jurisdictions, which have been called to our attention by counsel for the plaintiff, and which seem to lay down the rule that officers of a corporation, serving without pay, are in its "employment", performing services "under any contract of hire." It is sufficient to say that all administrative rulings which have been called to our attention, as reported in the Prentice-Hall Unemployment Insurance Service, have been examined. They are by no means unanimous and no reasons have been discovered therein which would justify us in assigning to the language of the statute an unusual meaning which, so far as we are informed, has never received judicial approval.
Judgment for the defendant.