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FORREST A. ROLLAND v. COMMONWEALTH PENNSYLVANIA (08/26/80)

decided: August 26, 1980.

FORREST A. ROLLAND, JR., PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Forrest A. Rolland, Jr., No. B-163872.

COUNSEL

David A. Ody, Henry, Corcelius, Gates & Gill, for petitioner.

William Kennedy, Assistant Attorney General, with him Gary J. Marini, Assistant Attorney General, Richard Wagner, Chief Counsel, and Edward G. Biester, Jr., Attorney General, for respondent.

Judges Rogers, Blatt and MacPhail, sitting as a panel of three. Opinion by Judge Blatt. Dissenting Opinion by Judge Rogers.

Author: Blatt

[ 53 Pa. Commw. Page 563]

Forrest A. Rolland, Jr., (claimant) appeals here from an order of the Unemployment Compensation Board of Review (Board) which affirmed a referee's decision finding him to be a self-employed businessman and therefore ineligible for benefits pursuant to Section 402(h) of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(h). We will affirm.

The claimant was president and a member of the board of directors of General Dealers Services, Inc. (corporation) and received a salary of $480 per week. He owned approximately one percent of the stock of the corporation and voted these shares at the stockholders' meetings. The evidence reveals, and the referee so found, that the chairman of the board of directors of the corporation exercised ultimate control over the corporation but that the claimant oversaw its everyday business and played a substantial part in the overall control and policymaking. The claimant sold his stock and resigned from his position as president and member of the board of directors

[ 53 Pa. Commw. Page 564]

    in January of 1978 at the request of the chairman of the board of directors, who wished to consolidate the corporate power in his own family.

In Starinieri v. Unemployment Compensation Board of Review, 447 Pa. 256, 289 A.2d 726 (1972), our Supreme Court held that a person need not be a majority shareholder of a corporation in order to be ineligible for benefits as a self-employed businessman. According to the Court in Starinieri, 447 Pa. at 259, 289 A.2d at 727, a self-employed businessman is "one who through ownership of stock and his position in the corporation exercises a 'substantial degree of control' over its operation."

The claimant contends that this Court should reverse the order of the Board in the case at hand because there is not substantial competent evidence, as required by Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704, to support a finding of such control as is required under Starinieri, supra.

It is undisputed that the claimant met the first requirement set forth in Starinieri, supra: i.e., that of owning stock in the corporation. And, although it was a small portion of stock that he owned, the number of shares is not the decisive factor in our determining whether or not he was a self-employed businessman. Starinieri, supra. See Newman v. Unemployment Compensation Board of Review, 37 Pa. Commonwealth Ct. 455, 390 A.2d 1382 (1978) (ownership of eight percent of a corporation's shares coupled with substantial degree of control over the corporation is sufficient to show self-employment).

We also believe that there is substantial evidence in the record to support the Board's finding that the claimant exercised a substantial degree of control over the corporation. For example, the testimony at the ...


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