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April 12, 1948


The opinion of the court was delivered by: BYERS

The plaintiff sues to recover the lump sum payment provided in Section 202(g) of the Social Security Act, 42 U.S.C.A. § 402(g).

She is the widow of Landon A. Sipperley, and pursuant to order of this Court was permitted to conduct this cause in forma pauperis.

 The plaintiff's husband died September 18, 1943, and her said claim was made to the Social Security Board and denied, and at her request a hearing was had before a referee in accordance with procedure under the statute, and he decided against her claim on December 3, 1945. Review was denied by the Appeals Council, and this action was brought within the statutory time limit as extended. There is no dispute that from 1937 and for three-quarters of the year 1943, inclusive, social security taxes on the wages said to have been earned by the decedent were duly paid both by the employer and the employee, according to the following figures: "Year Amount 1937 $ 1572.23 1938 1783.40 1939 1830.40* 1940 1830.40 * 1941 1855.40 * 1942 1884.00 * 1943 First quarter 486.20 * Second quarter 486.20 * Third quarter 448.80 * * Deleted"

 The deletions above noted signify that the taxes paid upon the said wages are disregarded for present purposes by the defendant because Landon A. Sipperley is said not to have been an employee during the periods so indicated; thus, although the Government has accepted and retained the taxes on the theory that they purchased so-called social security, the obligation to perform the statutory duties is to be avoided upon the ground stated. If this position is sound, the purpose of the statute to ameliorate hardship caused by the death of a bread-winner is being defeated on non-meritorious grounds.

 There is no offer contained in the Answer filed by the Government, to refund the social security taxes which it has so collected.

 The reason for the refusal to pay the lump sum benefit is thus stated in the report of the referee:

 'Since at least January 1, 1937, the wage earner was the sole administrator of the estate of Calvin E. Sipperley, deceased, the wage earner's father. The wage earner, as well as his two younger brothers, had been employed on a weekly wage basis in his father's plumbing and heating business until the latter's death. The business was operated by the wage earner, as sole administrator of his father's estate, until the wage earner died.* There has been no final accounting in the father's estate nor was the wage earner paid any statutory fees as administrator thereof

 'After the father's death, the three sons, including the wage earner, agreed among themselves that they would continue to operate the business and that the wage earner would be in charge as administrator.* Thereafter, they continued to render the same services as theretofore and continued to receive payments from the estate for such services. Whereas the wage earner had received greater remuneration than the others for his services theretofore, the three sons received equal remuneration starting January 1, 1939. After the father's death, the wage earner was not supervised or controlled in his work by anyone nor did anyone have the right to do so.*

 The power of the Court to review the determination of the Board is thus defined in the statute, 42 U.S.C.A. § 405(g): 'The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Board, with or without remanding the cause for a rehearing. The findings of the Board as to any fact, if supported by substantial evidence, shall be conclusive, * * * .'

 The present exercise of the Court's responsibility is the subject of instruction in the following cases: Walker v. Altmeyer, 2 Cir., 137 F.2d 531; United States v. Lalone, 9 Cir., 152 F.2d 43.

 The admonitions contained in the opinions in these cases are not thought to restrict the Court to an automatic approval of this decision of the Board, in view of the manifest purpose of Congress that, to some extent at least, the Court should inform itself with respect to the evidence upon which the Board had acted, in order to appraise its substantiality.

 The testimony taken by the referee is that of the plaintiff, and of her attorney; the latter had to do only with the non-payment of commissions to the decedent as administrator of his father's estate.

 The referee's decision does not disclose the date of the death of the decedent's father, nor the date on which letters of administration were issued to the decedent; nor does it recite whether any special power were conferred upon the administrator by the Surrogates Court in excess of those ordinarily incident to his office.

 A certain confusion seems to have arisen concerning the devolution of the decedent's property, on the one hand, and the business conducted by Landon A. ...

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