*2 SIBLEY, Before LEE, HOLMES, Judges. Circuit HOLMES, Judge. Circuit These two were consolidated cases below; sepa- and, trial in the court judgments entered, rate been attorneys stipulated by parties for all rec- also be consolidated appeal. hearing ord and involve period extending Janu- 31, 1940, ary 1937, to March and for years 1937, calendar under IX, respectively, Titles VIII and Security Act, U.S.C.A. §§ seq., seq., pro- et 1101 et and corresponding Code, visions of the Internal Revenue Int.Rev.Code, U.S.C.A. et seq., §§ seq. question presented cer- tain individuals who assembled fruit labeled, filled, and loaded them for trans- portation, were, when performing these services, employees taxpayers with- meaning of 811(b) Sections and 907 Act, (c) of the Social and Sec- 1426(b) 1607(c) tions Internal Int.Rev.Code, Revenue Code, U.S.C.A. 1426(b), 1607(c). facts touching §§ SIBLEY, Judge, dissenting. Circuit dispute, here in as found below, substantially the court as fol- lows: years
During question, tax- payer engaged pro- business of harvesting, packing, ducing, and market- thereof; shipped, products assembled than citrus fruits and and, business, paid for as a owned and tor its counted such others, operated, among house in them hundred. at the same rate *3 in Orange County, Winter Park Florida. the employees contractor and his unloaded partA and taxpayer, freight cars business of which knocked-down boxes from trucks, house, conveyor was put on and which packing carried in them on the its consist- ed in preparing secur- up boxes for There the carried the floor. fruit, them to second ing the filled, lids loading enough space when the floor for was on second the boxes shipment. performance In a the one- the knocked-down boxes and operations of house, boxes, these day’s packing its the supply of assembled taxpayer employed stipulat- at a to four generally contractors thousand of two consisted per rate ed box. Each was contractor un- thousand boxes. der an contract, individual and acted at boxes, the the assembling In addition periods during years ques- various the stamped and employees his contractor performed tion. The contractor all or grades different the labeled them show boxing operations of the for the In contain. they were fruit which of employed such workmen as were nec- many boxes know how order for them essary accomplish what was intended. the tell them would taxpayer assemble, the Under the of its terms -contract with the be needed would approximate number that employed so individuals as con- of size state the also day, tractors, the taxpayer payments made stamp required, the the that boxes each, calculated number of the boxes them, put used, the label to to be by handled each contractor at the contract- a grade or best is, the that per ed rate box. nailing ma- The nails grade. lesser assembling of stand- the in the types used of box- chine taxpayer The used different taxpayer. furnished prod- pack fruit ard boxes were which to its fruit and es in season, worked contractor the by taxpayer the bought During Some the were ucts. exclusively the tax- under his and unloaded in a knocked-down condition be- out hold himself cars, payer, and did not car- freight whence employees public. His ing to the available to the floor of ried second the experience for the work or no skill house, Those needed where were assembled. They covered performed. wire, re- that and when were bound boxes Compensation taken out by Workmen’s to a there were six boxes bundle. ceived reported and taxpayer. contractor the The companies boxes that sold the One of the covering his em- security taxes push- paid used in the tools furnished substantially hours ployees. Their making the together and thus the wires employees of tax- same the as admitted type box, called the the Another of boxes. except had payer, on occasions when work sides, three two box consisted of standard night in order to assemble middle, to be done ends, bottoms. and two Such necessary number of the boxes together nailed as contrasted boxes packed. the time During fruit was to and constituted boxes, the wire-bound with worked, assembling these portion boxes of total used. only a small the boxes, entire their time was absorbed stored on the second floor also work, compensation therefor such During years in- there. and assembled source income. constituted volved, used annual number of all boxes season, Prior to the 1937-1938 one of 300,000. During the seasons of averaged employee had an contractors worked as paid per the contractor was 1937-1938 85^ hourly doing on an basis same For the boxes assembled. sea- hundred one taxpayer. work for the one 1938-1939, son 62%$ He was boxes assembled. hundred contractor his Another basis of the week on the of each end lidding, fastening tops or down the during week, shown packed. after the fruit had been taxpayer. At the conveyor manifest work was done on This season, packers. from boxes had been the boxes came more end of authority right no full fastening nailing done on the first to interfere employ discharge close of packing house, contractor floor company proximity pleased. of the whomsoever he had admitted occasions, right employees, to control the number taxpayer. instructions On some respect wages, com- nailing lidding of the their or hours worked. employees pany right work given boxes were to insist directly to super- keep pace re- contractor the contractor with the foreman or quirements company; contractor visor but whether accomplished by large one this hundred boxes fastened number 87%$ *4 or paid working and was men short hours lidded, the end or a num- small ber shipped long week the basis working boxes not the hours was within the company’s during the control. The week. method of con- tracting for among this work was current Still another contractor loaded the boxes packing houses. of fruit the taxpayer. for He was moneys paid by All the taxpayer, the the rate of one hundred boxes 87%$ sought recovered, taxes herein to be were loaded, and compensation received at the moneys belonged that to the end of the week on the basis of the boxes moneys included no that had been deducted shipped during the The loading week. the amount or due the named in- carried on the contractor and his em- dividuals. ployees by the hand-trucks, use of in which the boxes The pay- were district court conveyor removed from the the taxpayer to ments made freight carried the the to trucks, cars the named or individuals, respect where with to were which packing- loaded. The the taxes were manager gave collected, house assessed and instructions to to the con- tractor as independent to named whether the individuals as boxes con- were to be tractors, loaded on trucks and were not freight employ- or cars, types loaded, of boxes to ment be within the place meaning of Titles VIII of des- tination. The Security IX the Social boxes mainly The Act. in carload or court relationship truckload also found that lots with few exceptions employee oranges were not exist be- used to already fill out tween the partially and the named filled individ- cars or trucks. For employees uals and their respect 1939-1940 with to season this con- performed operations performed tractor operations, all the taxpayer, three is, the for which assembling, payments lidding, were made the tax- loading of payer to compensated named at the individuals as above agreed rate of found. $1.35 one hundred box- He es. hired all of his employees, some of below, the decision At the time proposed by whom were taxpayer. and servant tests of master common-law upon Except widely thought controlling or to be instruct inform the determining fact their to the labels to the courts in ultimate or tors persons question boxes, the number placed whether the required weight immediate fu- among Ap- ture, authority the Circuit Courts of concerned about re- caution all peals to the the common-law moving cut draw attention to effect fruit, or master and servant and comply did not between work that distinction defective specifications, company independent contractor constituted the ul- exercised determining per- contractors or their em- test in whether a no control over timate incompetent Except object to services performing for another was ployees. son workmen, disorderly employee purposes or careless conduct to be considered an premises, company had of the Act.1 The critical on the 609; 1 Cir., Inc., Cir., Deecy Welch, 4 145 F.2d Glenn v. Co. Products Cir., 51; 916; Oil 148 F.2d Ameri F.2d 139 A.L.R. Standard Lazeroff, Cir., Cir., Fly, F.2d Oil Co. v. McGowan v. can Aerie, Vogue, v. Aberdeen A.L.R. United States v. United States may unemployment age needs when old whether question under that view statutory cov- per earnings.7 cut off person services for whom the persons whose erage is those not limited and direct right formed had to control direction services subject are to the services, performed the individual who employer, but rather control accomplished of their the result to as to reality, those economic a matter of work, who, but to the details and also as accomp dependent upon the business means which that result was they render concept which the It was that service. lished.2 trial court required apply deemed itself disclosed facts From making evidentiary facts in its. ulti that the .services opinion record, we are persons of whether or not the mate inte part of an question constituted taxp pack to the devoted unit grated economic ayer.3 products. and fruit ing of citrus fruit now decide need We ex requiring skill simple, work was *5 upon the court below the facts as permanence. of relative perience, control, taken with question of investment had any of the contractors None employment, circumstances the other tools and facilities, the substantial in since finding require an ultimate are sufficient by the premises furnished employees; because persons were that the tax exercised degree of control recent Court, in series of Supreme same would substantially the payer was view that cov decisions, announced has been ad expected contractors had be if the Act should erage under the piece. paid by Piece employees, mitted basis of the rationale be determined pointless much of the in makes work itself involving in the Fair applied by it cases normally exercised would be control which 1938, Act of 29 Labor Standards It is the hour. over JUS.C.A. seq., National Re 201 et and the Labor § however, in where the significant, Act, seq.4 Un 29 U.S.C.A. 151 lations § involved, the terests of the it is view, recognizing that der this while findings that control was exercised. disclose characteristically element associated an weighed, they will the facts However relationship employer-employee with the persons support a conclusion question considered, con of not, question as a eco in matter of determining trol is not factor.5 the sole dependent taxpay reality, nomic n Theultimate criteria are to be found in livelihood. er’s business as their means of purposes of the act.6 in Since in the instant case and the facts of do the case Rutherford v. McComb8 decisions, these act is Under appear distinguishable in ma protect intended to those whose livelihood degree, corresponding think re terial we dependent upon finding employment in is rule should reached. There is no sult of It is business directed to others. precisely rela of that defines thumb ward who themselves are those least able tionship between the em- good provisions to make for their times 1473; 722, Comb, 655; Magruder, 67 Bar S.Ct. Cir., 331 U.S. v. Grace 9 Birmingham, 126, 679; 53, 332 U.S.App.D.C. tels v. U.S. 67 F.2d 148 Nev 80 ins, Rothensics, Cir., 1547. F.2d 151 S.Ct. Inc. 3 v. 5 Birmingham, 126, 189; 332 Bartels v. U.S. v. Oil Wholesale United States Greyvan Lines, 745; Cir., 1547. 67 S.Ct. F.2d 154 10 Silk, 704, 412; Cir., Harrison, v. 331 6 United States U.S. F.2d v. 7 156 Inc. McComb, 1463; Bartels, Cir., Rutherford Birmingham S.Ct. v. 67 v. 8 F. 157 722, 1473; National S.Ct. 331 U.S. 67 2d 295. Agency, 2 Board Hearst Pub Labor Relations v. the Law of Restatement 111, lications, 851, 220, p. 322 64 S.Ct. 88 U.S. 483. Sec. Fly, 3 Cir., L.Ed. 1170. 135 Oil Co. 5 American v. 7 619, 641, Davis, Helvering v. 491, 301 U.S. A.L.R. 824. 492, 147 F.2d 1307, 904, Greyvan Inc., Lines, 81 L.Ed. A.L.R. 57 S.Ct. Harrison v. v. Silk, 1319; U.S. United States United States S.Ct. U.S. Silk, 67 S.Ct. 67 S.Ct. 331 U.S. v. Corporation 331 U.S. S.Ct. Mc- Food Rutherford loss, legal house had relation to work- Degrees control, these ployee. risks por- in facili- being men profit, except, investment the owner opportunity for relation, premises tion of assigned doing and skill this ties, permanency of work, it important premises for de- was bound that the workmanship, all are see Walker, reasonably safe. controls Bradford, entire situation cision. The and Hobbs their several (cid:127)decision.9 workmen, taxes, less their out of arc, what re- appealed judgments weekly received box- settlements versed, fur- remanded for causes es made or loaded under their with this proceedings not inconsistent ther contracts; they paid their own taxes, opinion. what profit. was left was the season’s SIBLEY, Judge (dissenting). Circuit dispute, however, The taxes as- nothing paid Bradford, sessed on all that is There the conclusions law Walk- Hobbs, er judge although district infer- greater part to warrant went to their ence that had an view the erroneous workmen and of it some fact, went security very findings made law. He clear due Brad- Walker, ford, well warranted being uncontradicted evi- Hobbs as them- employers. selves dence, unjust and our those seems to me require Bradford, facts self-contradictory say these three Walker, men are Hobbs were each what is wages, is taxable who and at pack-n the same producers, time *6 say they employers ers and marketers are citrus fruits Or- and owe as such greater taxes on part County, Florida, ange of what them. fact 1939. being bona fide employers of others on their own account day, week They not hired agents not as plaintiffs here citrus month, wage. and at fixed In no what distinguishes this case from those re- been the has fruit business since it cently Supreme decided Court. packing sea- beginning at custom the months, son, four lasts three or they not offer to serve is true that persons desiring to bids they to receive had contracted for others after season to construct con- true season. That packing house are to a long job a took so as lasted which tractor down, them and to label and load knocked they But others all his worked for time. they packed, so much into cars between and' farmed seasons. packing antedat- premises hundred This custom They boxes. ma- used the tools security not an and was taxpayers ed the social laws, executing terials of the Bradford, effort circumvent they might them. so contracts, done but have and Hobbs were the bidders Walker low to build houses instead had contracted house, taxpayers’ packing con- and received during The United boxes. States jobs all or tools, of these premises, tracts war furnished and materials They shipping named could ships per ship, above seasons. at so much to build themselves execute the work possibility of loss to the but builder, for, but each hired other contracted independ- idea that the builder was not an all, aid in as approve. men to the work or to do we did not ent contractor St. desired, taxpayers having nothing Shipbuilding River v. Adams et Co. Johns al., hiring, discharge to do with control or While the contractors them, capitalists, paying them no were not con- here 400,000 boxes, (cid:127)owing eight or more none. When hun- tract for $1.35 recognized contractor, season, were used he Hobbs the last dred $5,400, was an under a very come to sum. substantial security laws and his and their social free men and entitled to work security accordingly. employers taxes others if contractors Schwing States, Wanamaker, v. United States William H. Inc. v. United Cir.
1948,
employees. Supreme of Florida Court Bros. such in Gentile held Hobbs was not Commission, 151 v. Florida Industrial Co. mod- a statute Fla. 10 So.2d under taxpayers Act. These eled the federal security nothing
deducted for social paid them; the United
from what was them as
States such taxes from collected wag-
employers, including deductions from
es due their I think workmen. Bradford, and Hobbs not Walker independent
could be
tors, they ought but that to be. et al. v. SWITCH
MacLAUGHLIN UNION
& CO. SIGNAL al.
BORLAND v. WESTINGHOUSE AIRBRAKE CO.
No. Appeals,
Circuit Court of Circuit. Third *7 Argued Dee. Decided Feb.