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JOHN STARR v. COMMONWEALTH PENNSYLVANIA (10/10/73)

decided: October 10, 1973.

JOHN STARR, APPELLANT,
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, APPELLEE



Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of John Starr, No. B-111249-B.

COUNSEL

Warren W. Bentz, for appellant.

Sydney Reuben, Assistant Attorney General, with him Israel Packel, Attorney General, for appellee.

Judges Kramer, Wilkinson, Jr. and Rogers, sitting as a panel of three. Opinion by Judge Kramer.

Author: Kramer

[ 10 Pa. Commw. Page 266]

This is an appeal filed by John Starr (Starr) from an order of the Unemployment Compensation Board of Review (Board) dated October 11, 1972, denying Starr unemployment compensation benefits.

The record in this case is unduly complicated by the confusing and recanting testimony of the claimant. It is further compounded by vague descriptions of a parent-subsidiary corporate structure, which in turn is made even less comprehensible by a complex federal bankruptcy proceeding, under Chapter X of the Federal Bankruptcy Law.

We glean from the record that Starr is a man of extensive experience in corporate affairs. For approximately nine months prior to February 26, 1971, he served as secretary and financial officer of Byrd Plastics, Inc. (Byrd), of Erie, Pennsylvania. Although the record is not quite clear on the corporate status of Byrd on February 26, 1971, it is clear that Starr held his offices in Byrd because of a transaction whereby Byrd was intended to become a wholly-owned subsidiary of Stanwood Oil Corporation (Stanwood) of the same city. Starr owned 250,000 unregistered voting shares of stock out of 6,000,000 shares of Stanwood stock. He was one of 4,300 shareholders of Stanwood. By his own testimony, Starr was chairman of the board of Stanwood and a director of Byrd. His $30,000 per year salary had been established "by the Board of Directors of the parent [Stanwood] Company," but was to be paid by Byrd. Between July of 1970 and his termination in February of 1971, Starr received approximately $22,500 in wages. Starr described some of his duties as "personnel manager, purchasing manager,

[ 10 Pa. Commw. Page 267]

    plant manager, to handle the ordering of materials and personnel regarding the manufacturing and sales of the Carrousel dishwasher." He also worked on the production line during a labor dispute as a "production supervisor, assembler, . . . shipping clerk, . . . expeditor, . . . tester and inspector." He stated that as financial officer he attempted to raise money to expand the production and manufacturing operation of Byrd. He traveled extensively for Byrd to confer with "financial people." He had the authority to issue and sign checks drawn on Byrd's bank accounts. In fact, subsequent to his dismissal in 1971, he made an attempt to prove his authority, or at least test it, by actually issuing a Byrd check for $2,000, which he later repaid by direction of the trustee in bankruptcy.

The Board permitted two hearings in this matter. At the first hearing, Starr testified that he was the only supervising director of Stanwood, but he did not have total control over Byrd because of the jurisdiction of the bankruptcy trustee. He recanted that assertion at the second hearing and indicated that any control he might have exercised over Byrd was subject to the approval of its president. The record is quite clear that after Starr filed a pleading in the Bankruptcy Court, under which he proposed to oust the organizer and existing president of Byrd, his employment with Byrd was terminated.

After making application for unemployment compensation benefits, Starr's complaint was denied by the Bureau of Employment Security, the referee, and the Board. In his appeal to this Court Starr contends that he is an officer-employee of Byrd, who was discharged ...


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