SSR 63-19c: SECTION 211(a). -- NET EARNINGS FROM SELF-EMPLOYMENT -- SOIL BANK PAYMENTS
CLARK v. CELEBREZZE, 208 F.Supp. 505 (1962)
- Where a farm owner and the tenant of her farm placed part of the farm in the soil bank and the tenant farmed the remainder but the owner did not materially participate in the production or management of production of agricultural commodities on the remainder, held, the soil bank payments received by the farm owner are not creditable to her as net earnings from self-employment.
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Plaintiff is entitled to old-age insurance benefits under the Social Security Act only if the income she received [soil bank payments] during 1957 and 1958 constituted net earnings from self-employment, as defined in Sec. 211 (a) of the Social Security Act, 42 U.S.C.A. 411(a). Plaintiff's income from her farm would be includible as net earnings from self-employment only if plaintiff was the actual operator of the land or if she had materially participated in the production or the management of production of the crops grown on her land under an agreement with her son, Dwight Clark, that she so materially participate. Rev. Rul. 60-32, Cum. Bull. 1960-1, p. 23; Sec. 211(a)(1) Social Security Act, 42 U.S.C.A. § 411(a)(1). The Appeals Council [of the Social Security Administration] found that plaintiff failed to establish her eligibility for benefits under either test.
Plaintiff is the owner of two tracts of land in Lincoln County, south Dakota, one comprising 160 acres, and the other 60 acres. During the twenty years immediately preceding 1957, the two tracts of land had been farmed by plaintiff's son, Dwight Clark, who paid plaintiff cash rent yearly. Sometime prior to 1957, it was decided to put the 160 acre tract into the soil bank for the year 1957. Dwight Clark testified that in 1956 he was farming 800 acres of his own land in addition to plaintiff's 220 acres. He stated that he hurt an eye in 1956 and therefore desired to cut down on his farming operations; consequently, he urged his mother to put her farm land into the soil bank. It appears that plaintiff and her son reached an agreement whereby Dwight Clark was to seed the 160 acre tract to grass in order to make the land eligible for soil bank participation, and in return Dwight was to keep the entire crop from the 60 acre tract which he continued to farm. The 160 acre tract was duly placed in the soil bank. * * * Both plaintiff and her son testified that Dwight Clark turned his soil bank checks over to Caroline O. Clark in 1957 and 1958. Dwight Clark testified that he should not have been listed as the tenant of the land since it was his mother who had placed the land in the soil bank. It was Dwight's contention that he was listed as the tenant merely to satisfy the requirements of the ASC regulations which prohibited a landlord from displacing a tenant in order to place land in the soil bank.
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The Appeals Council found that Dwight Clark continued to be a tenant both of the 60 acre tract and the 160 acre tract. The Council found that the fact that Dwight Clark turned over his share of the soil bank payments to his mother did not, in and of itself, identify Mrs. Clark as the operator of the 160 acre tract. The Council found that the fact that Dwight was to receive the full crop from the 60 acre tract in return for his share of the soil bank payments was consistent with the conclusion that he retained his interest as a tenant in the 160 acre tract and that plaintiff continued to be a landlord with respect to her total farm acreage. Plaintiff admitted that prior to 1957 she took no significant part in the production or management of the production of the crops grown on her land. There is no clear evidence in the record that would support a finding that plaintiff made any significant change in her relationship to the land after it was placed in the soil bank. Her only activity with respect to the soil bank land was an occasional inspection of the Stand of grass and a check of the weeds. As far as the 60 acre trace is concerned, Dwight clark himself testified that he operated it just as he wanted to and that he raised the crops that he desired. On the basis of the foregoing recited facts, the Appeals Council found that plaintiff was not the operator of her farm land in 1957 and 1958.
The record discloses no evidence or testimony that there was an agreement between plaintiff and her son that plaintiff was to materially participate in the production or the management of the production of crops on her land. Sec. 211(a)(1) of the Social Security Act, 42 U.S.C.A. § 411(a)(1), requires an arrangement between the owner and the operator of the land that the owner shall materially participate in the production or the management of production of agricultural commodities on the land. Thus plaintiff's income from her land in 1957 and 1958 is not includible as earnings for self-employment. Moreover, even if there had been such an arrangement, plaintiff would still not prevail since the Council found that her activities with respect to the land did not constitute material participation.
* * * the law is clear that this court is bound by the inferences drawn by the administrative agency, if they are supported by substantial evidence. Gainey v. Flemming, 10 Cir., 1960, 279 F.2d 56.
After having examined the record very carefully, the Court is of the opinion that there substantial evidence on the record as a whole to support the decision of the Appeals Council. The defendant's motion for summary judgment is granted.