Opinion
April 17, 1963.
June 12, 1963.
Unemployment Compensation — Voluntary termination of employment — Principal officers and controlling stockholders of corporate employer — Failure of corporation — Purpose of Unemployment Compensation Law.
1. Where unemployment compensation claimants are the principal officers and controlling stockholders of the corporate employer and the corporation fails, the claimants are ineligible for compensation on the ground that their unemployment was due to voluntarily leaving work without cause of a necessitous and compelling nature.
2. The Unemployment Compensation Law was not enacted to compensate individuals who fail in their business ventures and become unemployed businessmen.
Before ERVIN, WRIGHT, WOODSIDE, WATKINS, MONTGOMERY, and FLOOD, JJ. (RHODES, P.J., absent).
Appeal, No. 19, April T., 1963, by claimants, from decisions of Unemployment Compensation Board of Review, Nos. B-72377, B-72378, and B-72379, in re claims of Philip O. Freas, II, et al. Decisions affirmed.
Vincent M. Casey, with him Margiotti Casey, for appellants.
Sydney Reuben, Assistant Attorney General, with him Raymond Kleiman, Deputy Attorney General, and Walter E. Alessandroni, Attorney General, for Unemployment Compensation Board of Review, appellee.
Argued April 17, 1963.
In this unemployment compensation case the bureau, the referee and the board all concluded that the three claimants were not entitled to compensation because of § 402(b, 1) of the Unemployment Compensation Law, 43 P. S. § 802(b, 1).
Three separate claims for benefits have been appealed to us in a single record, pursuant to § 505 of the Unemployment Compensation Law, since they all involve the same issues and are based essentially on the same set of facts. The appellants, Philip O. Freas, II, Jay H. Freas and William R. Freas, were last employed by Freas Brothers, Inc., Punxsutawney, Pennsylvania, as parts manager, general manager and salesman, respectively. Appellants were the secretary, president and treasurer, respectively, of Freas Brothers, Inc., each owning one-third of the stock of said corporation.
On February 13, 1962, due to the corporation's inability to meet its financial obligations, all of its assets were levied upon, as a result of which the appellants became unemployed. We have held in a number of cases recently that where the claimants are the principal officers and controlling stockholders of the corporate employer and the corporation fails, the claimants are ineligible for compensation on the ground that their unemployment was due to voluntarily leaving work without cause of a necessitous and compelling nature: DePriest Unemployment Compensation Case, 196 Pa. Super. 612, 177 A.2d 20; Muchant Unemployment Compensation Case, 175 Pa. Super. 85, 103 A.2d 438; Gheder Unemployment Compensation Case, 186 Pa. Super. 493, 142 A.2d 355; Wax Unemployment Compensation Case, 189 Pa. Super. 196, 149 A.2d 191; Urban Unemployment Compensation Case, 189 Pa. Super. 503, 151 A.2d 655; Meckes Unemployment Compensation Case, 190 Pa. Super. 578, 155 A.2d 463; Hyman Unemployment Compensation Case, 199 Pa. Super. 532, 185 A.2d 821. No essential purpose would be served in repeating the reasoning set forth in the above line of cases. The Unemployment Compensation Law was not enacted to compensate individuals who fail in their business ventures and become unemployed businessmen: Dawkins Unemployment Compensation Case, 358 Pa. 224, 228, 56 A.2d 254.
Decisions affirmed.