Appeal, No. 27, May T., 1951, from order of Court of Common Pleas of Dauphin County, August 28, 1950, Commonwealth Docket, 1949, No. 292, in case of Department of Labor and Industry, Commonwealth of Pennsylvania v. The Aluminum Cooking Utensil Company. Order affirmed.
Morley W. Baker, Special Deputy Attorney General, with him Robert E. Woodside, Attorney General, for appellant.
David B. Buerger, with him Ralph E. Evans, James H. King, Smith, Buchanan & Ingersoll and McNees, Wallace & Nurick, for appellee.
Before Drew, C.j., Stern, Stearne, Jones, Bell, Ladner and Chidsey, JJ.
OPINION BY MR. JUSTICE HORACE STERN
This is an appeal by the Department of Labor and Industry, Commonwealth of Pennsylvania, from an
order of the Court of Common Pleas of Dauphin County striking off a re-assessment made by the Department against the Aluminum Cooking Utensil Company for unemployment compensation contributions, and entering judgment in favor of that Company.
The re-assessment was made on November 15, 1949 in the amount of $10,283.66 with interest in the sum of $7,611.90. The contributions were claimed under the provisions of the Unemployment Compensation Law of December 5, 1936, P.L. (1937) 2897, as amended,*fn1 on the basis of unreported payments of commissions made by the Company between the years 1937 and 1948 to certain individuals known as distributors, junior dealers and field dealers.
The principal facts, stipulated by agreement of the parties, are as follows: -- The Company is engaged in the business of manufacturing and distributing aluminum cooking utensils. It enters into written contracts with distributors pursuant to which the latter solicit orders for the Company's products; these contracts are for definite periods. The distributors are not carried on the Company's payrolls. They may sell the merchandise at any price they desire, and the Company does not even know the price which they charge their customers. They have no desks or working space in any office of the Company, choose their own time within which to work, and are entirely free to engage in other activities and lines of business; it is estimated that one-third of them are so engaged. The contract designates a certain territory in which the distributor is to sell the Company's products, but he is at liberty to sell anywhere he pleases and to whomever he pleases. The distributors
are not given or required to follow any instructions or orders of any kind nor are they subject to any supervision, direction or control on the part of the Company. They may sell other merchandise, including that of the Company's competitors, and a number of them do in fact sell competitive products. They employ and pay their own assistants and do their own advertising. They may, and a substantial number of them do, carry a stock of merchandise, which they own in their own right; the distributor who does not carry such a stock is the exception. The Company has never withheld income tax from amounts paid distributors, nor any social security tax; distributors are not included in the Company's group life insurance or pension system and the Company has never carried as to them any workmen's compensation insurance. It has never paid any unemployment compensation contributions based on amounts paid its distributors in any of the States in which it has such distributors. The Company allows to distributors on ...