20 CFR 410.110(h), (j), and (m)
The general issue before the Appeals Council is whether the claimant is entitled to Black Lung Benefits. The specific issue is whether he is a "miner" as defined in section 402(d) of the Federal Coal Mine Health and Safety Act of 1969, as amended.
The claimant filed an application for Black Lung Benefits on February 16, 1970. That claim has been heretofore denied on the basis that the claimant is not a "miner" within the meaning of section 402(d) of the Act, as amended, since all of his work in coal mines has been performed as a self-employed individual rather than as an "employee".
Section 402(d) of the Federal Coal Mine Health and Safety Act of 1969, as amended, provides that the term "miner" means any individual who is or was employed in a coal mine.
Section 410.110 of Social Security Administration Regulations No. 10 provides definitions of terms used in the Act:
According to the claimant's testimony, he first became connected with the coal mining industry in 1945 hauling coal for various firms as a self-employed truck driver. On March 20, 1951, the record shows that he formed a corporation, known as The XYZ Trucking Company, whose principal business activity was hauling coal. In addition, he performed these same services for the ABC Coal Company during the first six months of 1952. An itemized statement of earnings reported to his Social Security record indicates that the ABC Coal Company reported wages to that record in the first two quarters of 1952 and that the XYZ Trucking Company reported earnings to his record on a regular basis from 1953 through 1962 and again in the last quarter of 1970.
With respect to the above employers, the Appeals Council is of the opinion and so finds that the claimant's services in their employ did not constitute those of a "miner" within the meaning of section 402(d) of the Act, as amended. Section 410.110(j) of the Social Security Regulations No. 10 provides that the term "miner" means an individual who is working or has worked as an employee in a coal mine, performing functions in extracting the coal or preparing the coal so extracted. Insomuch as the claimant's services for The XYZ Trucking Company and the ABC Coal Company consisted of hauling coal after its extraction and preparation, such services would not qualify him as a "miner" within the meaning of the above cited section.
The record shows that on July 24, 1958, the claimant formed a corporation known as RST Coal Company, of which he was the principal stockholder. According to the Certificate of Incorporation, that corporation was formed in part, for the following reasons:
The claimant testified that RST Coal Company was engaged in strip mining operation.
It is permissible to find, under the usual common-law rules, that the owner of a close corporation is an 'employee.' The corporation has the legal status of a person. 1. Fletcher Cyc Corp (Perm. Ed.) § 7. Generally, the corporation is considered the employer, not its stockholders. Ibid, §§ 14, 25. The corporation is an entity distinct from its members even if only one person owns the entire capital stock. A sole owner and his corporation are distinct and separate legal entities and must be so treated. Ibid, § 25,1. Thus, a sole stockholder employed by the corporation would be controlled and directed by the corporate person, not himself. Even if a person is the sole owner of a corporation, he may occupy a dual capacity as an executive officer and an employee of the company. 2. Fletcher Cyc Corp (Perm. Ed.) § 266. For purposes of workmen's compensation acts, stockholders, directors and officers of corporations are not precluded from being considered employees of the company if otherwise serving in an employee capacity. Ibid. § 266.1. Thus, assuming State law requirements have been adhered to with respect to corporate structure and operating procedures (i.e., a bona-fide corporation exists) and an otherwise bona-fide employment relationship under the common-law rules exists between the individual and the corporation, a sole stockholder may be considered an 'employee' for purposes of the Act and regulations."
In the instant case, the claimant testified that he worked in every capacity for the RST Coal Company, from president of the corporation to the lowest labor job of excavating coal. He testified that, whenever there was physical work to be performed, he worked alongside of the employee he hired, and that he generally performed office work only at night and on weekends. Accordingly, since the record shows that RST Coal Company was a bona-fide corporation and was operated as such by the claimant, the Appeals Council is of the opinion and so finds that a bona-fide employment relationship under common-law rules existed between the claimant and the RST Coal Company; and, therefore, that the services performed by the claimant in the employ of that corporation constituted those of a "miner" within the meaning of section 402(d) of the Act, as amended. The record shows that RST Coal Company reported wages to the claimant's Social Security earnings record continuously from October 1, 1958 through December 31, 1961. This employment constitutes 3.25 years of coal mine employment by the claimant.
It is the decision of the Appeals Council that the claimant is a "miner" within the meaning of section 402(d) of the Federal Coal Mine Health and Safety Act of 1969, as amended.
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