Tyndall v. Gardner
| Decision Date | 02 May 1967 |
| Docket Number | No. 11084.,11084. |
| Citation | 376 F.2d 746 |
| Parties | Frederick F. TYNDALL, Appellee, v. John W. GARDNER, Secretary of Health, Education and Welfare, Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Kathryn H. Baldwin, Atty., Dept. of Justice (Barefoot Sanders, Asst. Atty. Gen., Florence Wagman Roisman, Atty., Dept. of Justice, and Robert H. Cowen, U. S. Atty., on brief), for appellant.
No appearance for appellee.
Before HAYNSWORTH, Chief Judge, and BRYAN and WINTER, Circuit Judges.
The Secretary of Health, Education and Welfare has appealed from a judgment of the District Court overturning a decision of the Secretary imposing certain deductions, because of self-employment income, from old-age benefits which, otherwise, would have been payable and a penalty for an untimely filing of a report of such earnings. Tyndall concedes that during the relevant years he had some self-employment income, but he contests the inclusion in the computation of his distributive share of the income of a partnership engaged in farming operations, to which he contends he contributed no personal services. We think that his distributive share of such partnership earnings was properly included in the computation by the Secretary, and that the District Court erroneously rejected the Secretary's findings and conclusions.
The claimant, Tyndall, and his wife reside on one of two farms which they owned until 1960. In that year, they gave the farms to their two sons. Earlier, in 1953, however, operation of the farms had been assumed by a partnership known as Tyndall Farms, composed of the claimant and his two sons. The claimant paid self-employment taxes on his distributive share of the income of that partnership until 1960, when he became 65 years of age. He concedes that, in 1960, he received wages from a tobacco warehouse, and in that and subsequent years he had income from a third farm which he operated as lessee. He also concedes that the income from the rented farm is self-employment income which should be deducted from his old-age benefits, but he contests the inclusion of his distributive share of the income from Tyndall Farms, contending that he left the operation of that partnership entirely to the two sons.1
Neither the Examiner nor the Appeals Council undertook to resolve the factual question of whether the claimant actually rendered personal services to the partnership in the operation of the farms. Those earnings were included in the computation of the deductions on the theory that 42 U.S.C.A. § 411(a) required it, in light of the fact that Tyndall admittedly rendered personal services in the relevant years in the operation of the rented farm with resultant realization of self-employment income. The District Court was of the opinion that the claimant's share of the partnership net income was includible only upon a finding that he rendered personal services in the production of that income. After having made the factual finding that the claimant rendered no such services to the partnership, it entered an order overturning the Secretary's determination of the deductions and penalty.
The case is indistinguishable from Bernstein v. Ribicoff, 3 Cir., 299 F.2d 248. This, the District Court recognized, but it disagreed with Bernstein. We find Bernstein persuasive.
Bernstein was a lawyer, who, in the relevant years, had a small income from a law practice, it being in one year less than the minimum of $1200 allowable without a deduction. During the same years, however, he had a very substantial income from a partnership, to which it was found that he contributed no personal services. His distributable share of such partnership income was held includible in the computation of the deductions.
The congressional scheme is apparent in the statute. Qualified males who actually retire at age 65 are to receive old-age benefits without being penalized for the passive receipt of investment income.2 Indeed, the recipient is entitled to receive a minimal amount of wages or self-employment income without any reduction of the benefits payable. However, if his earnings exceed the minimum amount, the excess must enter into a computation of deductions from the benefits, which, dependent upon the amount of excess earnings, will reduce or entirely eliminate the benefits payable.3
Under § 403(f) (1), deductions are to be made when there are excess earnings with respect to every month, except a month in which it appears that the beneficiary was not engaged in self-employment...
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...Bernstein v. Ribicoff, 299 F.2d 248 (3rd Cir. 1962), cert. den. 369 U.S. 887, 82 S.Ct. 1161, 8 L.Ed.2d 288 (1962); Tyndall v. Gardner, 376 F.2d 746 (4th Cir. 1967). This Court concludes that no substantial constitutional issue is presented here. It is readily apparent that the "retirement t......
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Lambert v. Finch, Civ. A. No. 69-C-120-A.
...result of substantial services rendered to the coal company, includable in his net earnings from self-employment." See Tyndall v. Gardner, 376 F.2d 746 (4th Cir. 1967). The critical question then, and really the only question in the case, is whether Lambert rendered substantial services to ......