The opinion of the court was delivered by: ABRUZZO
This proceeding is brought pursuant to § 205(g) of the Social Security Act, 42 U.S.C.A. § 405(g), for a review of a decision of the Social Security Board, hereinafter referred to as the Board, in the matter of the application of the plaintiff, John E. Walker, for benefits under the Social Security Act Amendments of 1939, 53 Stat. 1362, 42 U.S.C.A. § 401 et seq.
There follows an epitome of the essential facts involved in this action.
Plaintiff attained the age of sixty-five (65) years on October 4, 1938.
An application for a lump sum payment under the Social Security Act of 1935, 49 Stat. 622, 42 U.S.C.A. § 401 et seq., was filed by him on October 14, 1938. A lump sum in the amount of $107.80 was paid to him based on wages of $3,080 received from one Pliny W. Williamson, a practising attorney, during the period from January 1, 1937 to October 4, 1938.
Subsequently, or on August 10, 1939, the Social Security Act was substantially amended, 53 Stat. 1362, 42 U.S.C.A. § 401 et seq. Under the amendments, provision was made for the immediate payment of monthly primary insurance benefits to those eligible therefor. § 202(a) of the Act, 42 U.S.C.A. § 402(a). Plaintiff was entitled to such primary insurance benefits.
He filed his application for same on January 3, 1940, based on wages quoted hereinbefore and on April 4, 1940, the Bureau of Old-Age and Survivors' Insurance of the Social Security Board, hereinafter called the Bureau, certified to him a monthly insurance benefit of $24.03 to begin with the month of January, 1940. From plaintiff's total benefits of $120.15 for the first five months, the lump sum payment of $107.80 theretofore paid to him was deducted, leaving a balance of $12.35 which was paid to him at the end of May of 1940. Plaintiff received and accepted regular monthly benefits of $24.03 thereafter through the month of February of 1941.
In 1940 and 1941, the Bureau received reports showing that Pliny W. Williamson had paid to plaintiff amounts totalling $1,138 for 1939 and $1,176.25 for the year 1940. After conducting an investigation as to these payments, the Bureau concluded that plaintiff had been employed by Pliny W. Williamson and had received wages of $15 or more per month during the years 1939, 1940 and part of 1941. Thereupon, the Bureau cancelled the monthly payments to the plaintiff, effective June 1941, and ruled that under § 203(d) (1) of the Act, 42 U.S.C.A. § 403(d) (1), deductions would have to be made from future payments due plaintiff in an amount equal to the fourteen (14) monthly benefits received by him while earning wages of more than $15 per month in employment. Penalties for failure to report employment were also included.
Disagreeing with the decision of the Bureau, plaintiff applied for and obtained a hearing before a referee of the Board. A hearing took place and testimony and other evidence was taken. In an opinion, dated November 27, 1941, the referee found that plaintiff was employed for wages in excess of $15 per month from January, 1940, to February, 1941; and that deductions should be made in accordance with the decision of the Bureau.
Dissatisfied with the conclusions reached by the referee, the plaintiff appealed to the Appeals Council of the Board. The Council affirmed the decision of the referee and adopted his findings as its own on January 23, 1942.
Seeking a review of the decision of the Appeals Council that he rendered services in the employment of Pliny W. Williamson for wages in excess of $15 per month from January, 1940, through February, 1941, the plaintiff instituted this action.
Throughout this entire proceeding before the Bureau, referee and Appeals Council, plaintiff has maintained that the payments he received from January, 1940, up to February, 1941, were not in the nature of wages. It is his contention that he was not an employee working for wages but an independent contractor performing professional services for legal fees; and consequently, no deductions under § 203 (d) (1) of the Act, 42 U.S.C.A. § 403(d) (1), should be made.
From the presentation of the facts involved, it is learned that the relationship between the plaintiff and Williamson began in 1927, when plaintiff rented office space from the latter for a stipulated monthly rental and paid for his own telephone and stenographic service. Approximately a year later, a new arrangement ensued whereby plaintiff was to receive a stated monthly salary for legal services performed for Williamson, with use of the office to carry on legal work of his own. This new plan was defined or described in a letter written by Pliny W. Williamson to the plaintiff, in January 1928, to wit:
"We are to be privileged to use, for professional services, such of your time as we may require, the assignments to be made with careful consideration of your own work. In payment of such services you are to have your present space, rent free, and in addition $100 per month. You and we both will keep a record so that, should this be unfair to either, a proper adjustment may later be made."
Later, Williamson increased the monthly payment to $200 which continued until January, 1938, when it was again reduced to $100. These payments of $100 per month in wages were continued until April 30, 1938.
The foregoing statement of facts is not in dispute.
The relations between the plaintiff and Pliny W. Williamson subsequent to April 30, 1938, are indicated in a communication from Williamson to the plaintiff, bearing the date of May 3, 1938, which reads:
"When the Social Security tax was being deducted you raised the question that your relationship here was not that of an employee. Whether it has been or not, I mentioned to you on April ...