349 F.2d 644 (9th Cir. 1965), 19898, McGuire v. United States

• Docket Nº: 19898, 19899.
• Citation: 349 F.2d 644
• Party Name: Melvin McGUIRE and Alvina McGuire, Appellants, v. UNITED STATES of America, Appellee. RAHIER TRUCKING, INC., Appellant, v. UNITED STATES of America, Appellee.
• Case Date: August 05, 1965
• Court: United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 644

349 F.2d 644 (9th Cir. 1965)

Melvin McGUIRE and Alvina McGuire, Appellants,

v.

UNITED STATES of America, Appellee.

RAHIER TRUCKING, INC., Appellant,

v.

UNITED STATES of America, Appellee.

Nos. 19898, 19899.

United States Court of Appeals, Ninth Circuit.

Aug. 5, 1965

John S. Moore, Velikanje, Moore & Countryman, Yakima, Wash., for appellants.

John B. Jones, Jr., Acting Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Robert I. Waxman, Harry Marselli, Attys., Dept. of Justice, Washington, D.C., Frank R. Freeman, U.S. Atty.,

Page 645

Ronald Hull, Asst. U.S. Atty., Spokane, Wash., for appellee.

Before ORR, KOELSCH and DUNIWAY, Circuit Judges.

ORR, Circuit Judge:

Taxpayers' unsuccessful suit for refund of federal withholding, unemployment, and social security taxes paid for the years 1959-1962 is the basis for this appeal. The District Court sitting without a jury dismissed the suit and denied motions for judgment notwithstanding the verdict and for a new trial.

The single question before us is whether the District Court correctly sustained the determination of the Commissioner of Internal Revenue that certain workers were taxpayers' employees and hence taxpayers were liable for taxes under the Federal Insurance Contributions Act, Federal Unemployment Tax Act, and withholding tax provisions pursuant to sections 3101-3125, 3301-3308 and 3401-3404 of the Internal Revenue Code of 1954.

Taxpayers were owners and operators of non-scheduled motor freight carriers engaged in hauling produce and fruit between the Yakima Valley in Washington and various points in California, chiefly the Los Angeles area. Taxpayers' operations consisted of picking up goods and transporting them to appointed destinations. Under the usual contract with its customers taxpayers were required to deliver their cargo to the loading dock of the receiver and unload it. The unloading operation was an integral part of taxpayers' contractual obligation, and taxpayers were responsible for the condition of the cargo during the unloading.

To perform the unloading phase of its operations taxpayers were required to engage the services of individuals other than their drivers because of Teamster Union policy forbidding drivers to unload. Taxpayers' drivers were given authority and were generally responsible for hiring these individuals, colloquially referred to as 'swampers.' While procedure at various destinations varied in minor details, drivers generally hired one or two unloaders at specific areas near the destination of their cargo where unloaders were known to congregate. Drivers were free to engage the services of any of the unloaders present. In most areas where taxpayers delivered their cargoes fees were set by agreement between the Teamsters Union and the California Trucking Association. These fees were standard and not subject to negotiation. They were usually paid in cash by the driver on a pre-job basis from a travel advance provided by taxpayers.

Once engaged, unloaders would accompany taxpayers' trucks to their first destination. If more than one destination was involved, the unloaders usually remained with the truck....