Builders Lumber & Supply Co. v. United States
| Citation | 48 F. Supp. 241 |
| Decision Date | 27 January 1943 |
| Docket Number | Civ. No. 361,362. |
| Parties | BUILDERS LUMBER & SUPPLY CO. v. UNITED STATES. JACOB MORTENSON LUMBER CO. v. SAME. |
| Court | U.S. District Court — Western District of Wisconsin |
R. E. Puchner and Richard P. Tinkham, Jr., both of Wausau, Wis., for plaintiff.
John J. Boyle, U. S. Atty., and Alvin M. Loverud, Asst. U. S. Atty., both of Madison, Wis., for defendant.
The above entitled actions were tried together as companion cases. In each action plaintiff seeks to recover from the defendant the amount of taxes, interest and penalty paid, under protest, to the Collector of Internal Revenue for the years 1936, 1937 and 1938. The facts in each case are practically identical and undisputed. Neither plaintiff had, during the time involved, eight or more employees, unless the corporation officers, who performed nominal and perfunctory services and who received no compensation, are to be classified as employees of the plaintiffs.
Plaintiffs contend that the provisions of the statute are intended to include officers of a corporation as employees only if the officers, aside from the fact that they were corporation officers, met the usual requirements of the term "employee", namely, that the services rendered by the officers must be performed for the corporation, and there must be compensation paid to the officers for the services rendered and the officers must be subject to control or supervision by the corporation.
The unsalaried officers of the plaintiffs for the years in question were the treasurer, secretary and the vice-president. The secretaries performed no services for the corporations except the countersigning of stock certificates and the preparation of the minutes of the corporate meetings. The vice-presidents performed no duties except that during a part of the year 1938 the vice-president of the Jacob Mortenson Lumber Company assumed and performed the duties of the president of the corporation.
The principal questions involved herein are: First: Is an officer of a corporation who received no compensation and performed some service for it, an employee within the statutory definition of the Act? Second: Is an officer of a corporation who received no compensation and who performed no actual services for the corporation but was subject to its control, an employee under the Act?
During the years of 1936, 1937 and 1938, each of the plaintiffs had in its employ, exclusive of its officers, less than eight employees who received compensation for services rendered the corporation. Section 907(a) of the Social Security Act, 49 Stat. 642, 42 U.S.C.A. § 1107(a), excludes from the term "employer" an employer who does not have eight or more employees.
Section 1101(a) (6) of said Act, 49 Stat. 647, 42 U.S.C.A. § 1301(a) (6), reads in part:
"When used in this Act...
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