Hoffman v. Gardner

• Decision Date: 20 December 1966
• Docket Number: No. 18221.,18221.
• Citation: 369 F.2d 837
• Parties: Ivan M. HOFFMAN, Appellant, v. John W. GARDNER, Secretary of Health, Education and Welfare, Respondent.
• Court: U.S. Court of Appeals — Eighth Circuit

369 F.2d 837 (1966)

Ivan M. HOFFMAN, Appellant, v. John W. GARDNER, Secretary of Health, Education and Welfare, Respondent.

No. 18221.

United States Court of Appeals Eighth Circuit.

December 20, 1966.

James A. Stemmler, of Stemmler & Stemmler, St. Louis, Mo., for appellant and filed printed brief.

Robert J. Koster, Asst. U. S. Atty., St. Louis, Mo. (at that time) for appellee. Richard D. FitzGibbon, Jr., U. S. Atty., St. Louis, Mo., was with him on the brief.

Before VOGEL, Chief Judge, MATTHES and MEHAFFY, Circuit Judges.

MEHAFFY, Circuit Judge.

Claimant, Ivan M. Hoffman, a resident of Webster Groves, Missouri, sought social security benefits based upon self-employment earnings by reason of his own and his agent's material participation in the production and management of production of farm commodities upon two farms he owned in Ringgold County, Iowa. The year involved is 1957 and the arrangements for operation of the two farms were in the form of written agreements with tenants, giving claimant complete managerial control over said farms.

The local office of the Social Security Administration denied the claim and appeal was processed to the Hearing Examiner, who also decided adversely to claimant. The Appeals Council thereafter denied formal review and the Hearing Examiner's decision, therefore, stands as the final decision of the Secretary.

Claimant timely filed an action in the United States District Court for the Eastern District of Missouri. Both parties filed motions for summary judgment. The District Court sustained the Secretary's motion, entering summary judgment and this appeal lies from that judgment. Jurisdiction is established by 42 U.S.C.A. § 405(g), 42 F.C.A. § 405(g) and 28 U.S.C.A. § 1291, 28 F.C.A. § 1291. We reverse.

The sole question for our determination is whether under the admitted facts claimant is entitled to benefits by reason of earnings from self-employment under the applicable statute.¹ The Hearing Examiner's eighteen findings of fact became the Secretary's findings and, additionally, the Secretary pleaded that the same were supported by substantial evidence and conclusive. We find it unnecessary to set forth in this opinion all of the numerous findings, but will paraphrase some and quote the ones we think vital to our conclusion.

Claimant was born on January 25, 1886 and lived with his parents on a farm until his graduation from college in 1913. The year following his graduation, he purchased a farm and has owned and been interested in farm land ever since. For some twenty years he had his brother-in-law, Rowe Denney, a farmer who lives in the vicinity of the Iowa farms, look after them by keeping in touch with the tenants and keeping claimant advised. Claimant compensated Denney for such services with a percentage of his income from the farms, In 1957 claimant entered into identical written agreements with two tenants for the farming of the Iowa farms. These agreements gave claimant complete managerial control, subject only to the right of the tenants to make suggestions. Under the agreements, claimant paid for all the grass seed, one-half of the corn seed, one-half of the hay bailing expense and all of the fertilizer expense. The straw, threshed hay and stalk field were to be fed on the farm. Claimant was not required to pay for the oats seed or threshing expense. The agreements further provided that claimant was to designate the place and time the crops were to be planted and when they were to be cultivated, harvested and divided. He was also responsible for designating when the crops were to be sprayed and the manner in which they were to be tended. The Hearing Examiner found the claimant performed all the acts called for in the written agreements.²

Claimant kept charts on his farms showing the liming history and other crop information, and each year sent a map to his tenants designating what to plant, where to fertilize, the type of fertilizer, instructions on fencing and terracing, etc. Claimant consulted periodically not only with Denney but directly with his tenants by telephone and letter, and in most such instances, advised and instructed them concerning the crops. Further, claimant and his daughter spent a week on the farms inspecting the growing activities and walked over the fields with Denney and the tenants, discussing the performance of the crops, soil and farm practices and giving advice on these matters. Denney inspected the condition of the crops on both farms two to four times a month during the growing season and kept in communication with claimant, relaying claimant's instructions and advice to the tenants. Because Findings of Fact Nos. 9 and 10 go to the heart of this case, we set them forth:

"9. Claimant made important decisions concerning the production activities on the farms. These decisions included decisions on what crops were to be planted, when and where they were to be planted, on the type of seed, on changes in the system of crop rotation, on the type of plowing (straight or contour), on the price and time at which to sell or seal crops, on changes in crop plans due to changes in weather conditions, on leveling of fields to make land more productive, on changing of fences to get better land into production and poorer land into pasture, on terracing, grassing of waterways, blocking of little ditches or washes and general soil conservation, on when to make soil tests, on spraying of crops and insect control, on weed control, on whether to make hay of oats and clover or plow them under, on participation in government programs such as the soil bank and on the termination or continuance of the landlord-tenant relationship.

"Claimant would seldom make decisions without first consulting with the particular farmer farming the place either by direct contact himself or through Denney. Claimant would also usually fully inform himself on the particular problem through farm periodicals or letters to agriculture colleges or both before making the decision if there was any particular change involved.

"10. Some of the decisions which claimant made were on new farming techniques the institution of which paid off in increased production and bigger profits. These decisions were not always made in one year but sometimes by reason of study over a period of two or three years. Some of such decisions had particular reference to 1957, in that either the program was instituted in 1957, or the decision was being made in 1957 such as the following: Claimant decided that with proper fertilization he could alternate corn and beans, both money crops, without the necessity of the five-year rotation plan which would include a couple of years of keeping it in meadow or in oats, clover or alfalfa crop, which does not pay much. Claimant decided that he could plant the ridges and bottoms in soybeans, a good money crop, for several years in succession. Claimant tried a new type of mammoth red clover which made a bumper crop and also improved the money crop on the land next year by as much as one-third. Certain terracing and soil conservation projects were accomplished by claimant which improved the crops in the bottom land. Claimant experimented with a new type of fertilizer which resulted in a big increase in the corn crop. Claimant, after considerable figuring, decided that it would be more profitable not to put certain land in the soil bank program.

"Claimant kept particularly close track of any new production technique or crop he tried, and if it did not perform as planned, he attempted to find out why."

Claimant's net profits from both his farms for the year 1957 amounted to $2,927.96. For that year there was a total expenditure on the two farms...