Provident Mut. Life Ins. Co. of Philadelphia v. Unemployment Comp. Comm'n

• Decision Date: 25 April 1941
• Docket Number: Nos. 35, 36.,s. 35, 36.
• Citation: 126 N.J.L. 348,19 A.2d 630
• Parties: PROVIDENT MUT. LIFE INS. CO. OF PHILADELPHIA v. UNEMPLOYMENT COMPENSATION COMMISSION et al. INVESTORS' SYNDICATE v. SAME.
• Court: New Jersey Supreme Court

19 A.2d 630

126 N.J.L. 348

PROVIDENT MUT. LIFE INS. CO. OF PHILADELPHIA

v. UNEMPLOYMENT COMPENSATION COMMISSION et al.

INVESTORS' SYNDICATE

v. SAME.

Nos. 35, 36.

Court of Errors and Appeals of New Jersey.

April 25, 1941.

Syllabus by the Court.

The Declaratory Judgments Act was not intended to supersede the jurisdiction of the Supreme Court to declare legal rights through the agency of its writ of certiorari, particularly in cases where that remedy is expressly provided by statute.

Actions for declatory judgments by the Provident Mutual Life Insurance Company of Philadelphia, and by the Investors' Syndicate, against the State Unemployment Commission and others. From judgments for defendants, plaintiffs appeal.

Affirmed.

Appeals from judgments for defendants-respondents in the Supreme Court on the striking out of complaint in each case by order of Judge A. Dayton Oliphant, as Supreme Court Commissioner, who filed the following opinion:

"This action is brought under the Uniform Declaratory Judgments Law of this State. R.S. 2:26-66 et seq. N.J.S.A. 2:26-66 et seq.

"It is alleged in the complaint that the defendants, the Unemployment Compensation Commission of New Jersey and Harold G. Hoffman as Executive Director thereof, have made certain determinations as to the status of the general and special agents of the plaintiff company and have determined that they are employees of the plaintiff within the provisions of the Unemployment Compensation Law, particularly Sec. 43:21—19, subdivision (i) (6) thereof, and that by reason thereof the Commission has directed the plaintiff to report the remuneration received by such agents and to make contributions thereon. Plaintiff was notified that unless contribution reports were received by the Commission April 1 1940, it would proceed with arbitrary assessment and legal action to collect the contributions. This action was instituted March 29, 1940.

"The complaint further alleges justiciable controversies exist and further says that if the Unemployment Compensation Law applies to the general and special agents of the plaintiff, it is unconstitutional, they being independent contractors.

"The Unemployment Compensation Commission and its Director have been named as parties defendant since they are the administrative officials designated by the Unemployment Compensation Law. The Attorney General was named a party because it is contended by the plaintiff that if the law is applicable to general and special agents it is unconstitutional. The Uniform Declaratory Judgments Law requires that he be named as a party where a statute is alleged to be unconstitutional. R.S. 2:26-72, N.J.S.A. 2:26-72. A general agent and eight special agents are made parties defendant as parties having an interest which would be affected by any declaration in this cause.

"The Commission and the Director have appeared specially to deny the jurisdiction of the Court, and to move for a dismissal of the complaint upon the grounds that the cause of action is against the State of New Jersey in so far as they are concerned, and that a cause of action for a declaratory judgment does not lie as to them without consent of the State.

"The Attorney General moves to strike and dismiss the complaint upon the grounds that a justiciable controversy does not exist, that the plaintiff has other and adequate remedy, and that any judgment entered in these proceedings would not terminate the uncertainty or controversy giving rise to the proceedings.

"Voluminous and exhaustive briefs have been submitted. I have carefully examined and studied same.

"For the purpose of disposing of this motion I need be concerned with only two grounds, that the cause of action is against the State and therefore does not lie, and that the plaintiff has other and adequate remedy.

"Many authorities and cases are cited to me by the plaintiff but the Supreme Court of this State, speaking through Mr. Justice Heher in Empire Trust Co. v. Board of Commerce & Navigation, 124 N.J.L. 406 , has disposed of both questions. As to suits against a State agency, and it must be admitted that the Unemployment Compensation Commission is a State agency, the Court said, 'It is embedded in our jurisprudence that the State is not suable in its own courts without its consent, and that a suit brought against a State agency is, in fact, a suit against the State if the judgment sought would operate to control the action of the State or subject it to liability,' citing Strobel Steel, etc., Co. v. State Highway Comm., 120 N.J.L. 298 . It is argued that this rule applies only where the State might be required to pay funds out of its treasury, or where State funds or property might be affected and that no such situation is presented here. The contention, if sound, is effectively met by the decision of the Supreme Court of North Carolina in Prudential Ins. Co. of America v. Powell et al., 217 N.C. 495, 8 S.E.2d 619, in a case similar to the instant one. Provision is made in our Unemployment Compensation Law for the assessment, levy and collection of compulsory contributions by employers as defined in the Act. The moneys collected are held in a separate State fund and are disbursed by the State Treasurer on requisitions of the Unemployment Compensation Commission. The members of the Commission are appointed by the Governor. The contributions to the fund are not voluntary. They are compulsory and constitute a tax. The plaintiff seeks by this proceeding...