Spillson v. Smith
| Decision Date | 07 February 1945 |
| Docket Number | No. 8609.,8609. |
| Citation | 147 F.2d 727 |
| Parties | SPILLSON v. SMITH, Collector of Internal Revenue et al. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Samuel O. Clark, Jr., Sewall Key, Harold D. Cohen, Robert N. Anderson, and Louise Foster, Asst. Attys. Gen., Alexander M. Campbell, U. S. Atty., of Ft. Wayne, Ind., and James E. Keating, Asst. U. S. Atty., of South Bend, Ind., for appellants.
Raymond Brooks, of North Manchester, Ind., and Samuel R. Rosenthal, Sidney M. Perlstadt, and Morton Lane, all of Chicago, Ill., for appellee.
Before SPARKS, MAJOR, and KERNER, Circuit Judges.
This is an appeal from a judgment in favor of plaintiff in an action brought to recover unemployment taxes claimed to have been illegally collected from Berghoff Grill, Inc., plaintiff's predecessor in interest. The taxes were assessed under the Social Security Act of August 14, 1935, c. 531, §§ 901 and 907, 49 Stat. 639, 42 U. S.C.A. § 1101 et seq. It was tried under the Tucker Act, 28 U.S.C.A. § 41 (20), to a judge without a jury. The question is whether the musicians who furnished the music at the Berghoff Grill and Gardens, a restaurant operated by Berghoff Grill, Inc., in Fort Wayne, Indiana, were in its employ within the meaning of section 907 of the Act.
Sections 901 and 907 of the Act provide in substance that every employer of eight or more persons shall for the purpose of unemployment compensation pay for each calendar year an excise tax, with respect to having individuals in his employ, equal to a designated percentage of the total wages payable by him with respect to employment during such calendar year; and that the term "employment" means any service, of whatever nature, performed within the United States by an employee for his employer, except certain types of employment not applicable in the case before us. The words "employer" and "employee" are not defined in the Act, but Treasury Regulations 90, covering the subject of employment under the Act, adopted as the test of the employer-employee relation the common law distinction between master and servant and independent contractor, the critical question being whether "the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished; that is, an employee is subject to the will and control of the employer not only as to what shall be done but how it shall be done," American Oil Co. v. Fly, 5 Cir., 135 F.2d 491, 492, or as was said in Radio City Music Hall Corporation v. United States, 2 Cir., 135 F.2d 715, 717: "The test lies in the degree to which the principal may intervene to control the details of the agent's performance." See also Texas Co. v. Higgins, 2 Cir., 118 F.2d 636.
The law is well established that the employer-employee relationship is to be judged by the presence or absence of no single evidentiary factor, but by an overall view, Anglim v. Empire Star Mines Co., 9 Cir., 129 F.2d 914, 917, and it has been held that the use of the word "employer" in contracts is not necessarily decisive of the relationship thereby created, Williams v. United States, 7 Cir., 126 F.2d 129, 133.
In the case before us, the facts briefly summarized are that on April 6, 1938, and May 12, 1939, the Carlton "Happy" Hauck Orchestra was engaged by Berghoff to furnish music at the Gardens, and contracts were executed on a form prescribed by the local union. Two contracts were executed by Carlton Hauck and Berghoff Grill, Inc. By the contracts Hauck agreed to furnish eight men, musicians who were members of a local union, to play during a sevenday, 42 hour week, for the sum of $330 weekly. Both contracts referred to Berghoff Grill, Inc. as the employer. The second contract recited that it was an "agreement of employment" with Berghoff, "the employer of 8 men," and that "the individual musicians are the employees," and that "Any payment by the employer to the musician's representative shall be as their agent for distribution among them."
Both contracts provided that the musicians must be members of the American Federation of Musicians. The eight musicians were members of the Federation, the constitution and by-laws of which provided, that "All leaders or contractors shall be responsible for the good standing of all musicians performing in their employ," and included a prohibition that "For theatrical engagements of every character the management can contract with the leader...
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