Pacific American Fisheries v. United States, 10395.

• Decision Date: 18 October 1943
• Docket Number: No. 10395.,10395.
• Citation: 138 F.2d 464
• Parties: PACIFIC AMERICAN FISHERIES, Inc., v. UNITED STATES. ALASKA PACIFIC SALMON CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Ninth Circuit

138 F.2d 464 (1943)

PACIFIC AMERICAN FISHERIES, Inc., v. UNITED STATES.

ALASKA PACIFIC SALMON CO. v. UNITED STATES.

No. 10395.

Circuit Court of Appeals, Ninth Circuit.

October 18, 1943.

Kerr, McCord & Carey, and Stephen V. Carey, all of Seattle, Wash., for appellants.

Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key, J. Louis Monarch, and Mills Kitchin, Sp. Assts. to Atty. Gen., J. Charles Dennis, U. S. Atty., of Seattle, Wash., Harry Sager, Asst. U. S. Atty., of Tacoma, Wash., and Thomas R. Winter, Sp. Asst. to Chief Counsel, of Seattle, Wash., for appellee.

Before GARRECHT, STEPHENS, and HEALY, Circuit Judges.

GARRECHT, Circuit Judge.

This case presents the question of whether the value of board and lodging, furnished to appellant's employees while in Alaska during the operating season, under the circumstances shown, constitutes wages taxable for social security purposes.

The Pacific American Fisheries, Inc., and Alaska Pacific Salmon Company, appellants, operate salmon packing plants in remote locations in Alaska. They each paid social security taxes on account of their 1937, 1938 and 1939 operations. The taxes paid included amounts computed upon the value of board and lodging furnished the employees at canneries in Alaska. Claims were made for refunds for the taxes paid on the value of the board and lodging that was furnished to employees. The claims were rejected and actions were brought in the District Court to recover said amounts, and recovery was denied. From these decisions, these appeals are taken and the two cases are presented together. There was considerable testimony that there were no living accommodations or places where employees could secure lodging or meals in these remote places where the appellants' fishing operations were conducted. In fact, it was necessary for the companies to furnish doctors or medical care in some of the locations that were too isolated and where medical attention could not be easily or readily obtained.

During the year 1938, the packers and unions could not agree on wages and it was finally agreed to form a fact-finding board to consider the subject of wages to be paid during the coming season. There was testimony that at the time the Board had under consideration the basic pay, there was no consideration of board and lodging because there was no controversy over that — it had always been furnished to the outside employees as distinguished from residents of Alaska. However, it was testified that it was brought to the attention of the Board that in fixing the basic pay they must take into consideration the fact that the company was furnishing board and room. The fact that the company furnished board and lodging was always taken into consideration. There had been controversies from time to time over the quality of the lodging and food furnished.

Through stipulation of counsel some portions of the labor contracts were admitted as exhibits. In addition to other general and specific provisions for furnishing of lodging and subsistence and provisions for cash remuneration, the contracts provided in some instances: for the quality and amount of food, bed linen, etc.; that in "addition to salary the company agrees to furnish suitable and habitable living quarters and wholesome meals of good quality and sufficient quantity"; extra compensation for work done during meal time; in addition to provisions for remuneration "will furnish food up to the value of $45 per man — All food used in excess of $45 per man shall be charged to and deducted from their respective accounts"; and "he shall receive wages at the rate of $90 per month and also board for time worked."

It thus appears that appellant by contract was...