*2082 Petitioner held not to have been an officer or employee of a State or a political subdivision thereof and not entitled to the benefits of section 1211 of the Revenue Act of 1926.
*313 In this proceeding petitioner asks to be relieved of a deficiency of $3,359.15 in income taxes determined by respondent for the year 1922. The sole question raised is whether or not petitioner was, during the taxable year, an officer or employee of a State or a political subdivision thereof.
FINDINGS OF FACT.
Petitioner is a consulting engineer and an expert in bridge construction. Previous to May, 1920, he had been employed by the Foundation Co. of New York. On May 24, 1920, the board of supervisors of Nassau County, New York, passed a resolution of the following tenor:
*314 WHEREAS, The County Superintendent of Highways has recommended that John R. Spelman, engineer of Rockville Centre, be appointed consulting engineers to assist him in connection with the construction of Wreck Lead Bridge connecting with the Long Beach Road; now, therefore, be it
*2083 RESOLVED, That said John R. Spelman be, and he hereby is, appointed consulting engineer on the construction of the Wreck Lead Bridge, provided that satisfactory terms and schedule of payments can be arranged by the County Superintendent of Highways and the Chairman of this Board with said engineer.
On June 5, 1920, pursuant to the above resolution the following agreement was entered into by the petitioner and the board of supervisors of Nassau County:
THIS AGREEMENT made the 5th day of June, 1920, between the County of Nassau, a municipal corporation, party of the first part, hereinafter designated as the "County" and John R. Spelman of Rockville Centre, County of Nassau, State of New York, party of the second part, hereinafter designated as the "engineer" Witnesseth:
WHEREAS the County proposes to erect a new bridge and its approaches connecting with the present existing road, over Wreck Lead Channel on the highway leading to Long Beach and has employed the engineer to furnish professional services as consulting and resident engineer and to make the necessary examinations, surveys, drawings and specifications for the building of said bridge and its approaches the said parties*2084 hereby covenant and agree as follows:
1. The engineer's professional services shall consist of necessary conferences with the County Superintendent of Highways, the Board of Supervisors and others connected in any manner with the erection of said bridge and approaches, the preliminary examination including soundings and borings, surveys and tidal data, drawings, reports, estimates of cost, approvals of War Department and State Highway Commission, secondary additional investigation soundings and borings, together with additional surveys and estimates and other data that will enable definite bids for construction, specifications, drawings and proposals for contractors to bid upon, final surveys, working drawings, specifications, consulting and general advice during construction, full professional services, including construction management, testing of materials, inspection of work and responsibility for the organization and execution of the work carrying it to completion for which services the engineer shall receive as compensation eight per cent (8%) of the total cost of the work, exclusive of the cost of engineering, (i.e. the cost of the work under the following schedule).
*2085 2. The payment to the engineer shall be made in accordance with the following schedule for services and payments. The schedule for services and payments shall be divided into four, (4) parts, "A", "B", "C" and "D" and the payments shall become due and are to be payable immediately following the completion of each part of the services to be rendered, upon the certificate of the County Superintendent of Highways that the services have been rendered and upon presentation by the consulting and resident engineer of his bill.
Each of the four parts shall be at a compensation of two per cent, (2%) of the total cost of the work making the eight per cent, (8%) for the complete services. The payments in schedules A.B. & C. shall be computed upon the estimated cost, pending execution or completion of the work.
The final payment after completion of part "D" of schedule, shall be computed upon the final total cost, (exclusive of the cost of engineering), together *315 with corrected payments for parts A.B. & C. which had been previously based on estimated costs, instead of actual cost.
SCHEDULE FOR SERVICES AND PAYMENTS:
Part "A."
Preliminary examination, including soundings*2086 and borings.
Preliminary surveys and tidal data.
Preliminary drawings.
Preliminary report.
Preliminary estimate of cost.
Procurement from the War Department of their approval of the clearances of the draw span and approaches, the clear height above high water, and the location of draw span with reference to the whole structure and bulk-head lines.
The approval of the State Highway Commission of such matters as come within their jurisdiction.
For this portion of the work as listed under Part A, the compensation shall be two per cent (2%) of the estimated cost of the work. Should the services of the consulting engineer be stopped by the Board of Supervisors, in fulfilling PART A, the consulting engineer at the election of the Board of supervisors shall be paid for such part of the work as scheduled hereinafter under "Alternative Schedule for PART A."
Part "B."
Secondary additional investigations, soundings and borings, together with additional surveys and estimates and other data that will enable definite bids for construction.
Specifications, drawings and proposals for constructors to bid upon.
For the portion of services rendered, as listed under*2087 PART B, there shall be a compensation of an additional two per cent, (2%) of the estimated cost of the work, making a total compensation of four per cent, (4%) of estimated cost for PART "A" and "B."
Part "C."
Final location surveys.
Final working drawings.
Final specifications.
Consulting and general advice during construction.
For the portion of services rendered, as listed under PART C, there shall be a compensation of an additional two per cent, (2%) making a total compensation of six per cent, (6%) of estimated cost of the work for PARTS A.B. and C.
Part "D."
Full professional services, including -
Construction management,
Testing of materials,
Inspection of work, and
Responsibility for the organization and execution of the work, carrying it to completion.
After completion of the portion of services rendered under PART D the final payment shall be computed upon the final total cost (exclusive of the cost of engineering) together with corrected payments for parts A.B. & C. which had been previously based on estimated costs instead of actual cost.
*316 In case the work is stopped or abandoned during the preliminary stage, PART A, *2088 the following alternative schedule may be elected by the Board of Supervisors in settlement for services of consulting engineer:
ALTERNATIVE SCHEDULE FOR PART A
As a retaining fee for personal services $3,000.00, and, in addition thereto, a payment for each working day (exclusive of Sundays and holidays) $100.00 per day for main office and $80.00 per day for field office, and such additional expense as may be incurred for borings, test piles and expert sub-aqueous work.
ALTERNATIVE SCHEDULE FOR PARTS, B, C & D
This part of the work is to be determined in accordance with the extent of progress, expenses and obligations incurred.
Should any dispute arise respecting the provisions of this AGREEMENT, or any question arising thereunder, or the value of the work done in case of abandonment, the same shall be submitted to three arbitrators, one chosen by the County Superintendent of Highways, one by the consulting engineer and these two to choose a third, and the decision of such arbitrators shall be final and binding on all parties.
The entire expense of such arbitration shall be borne by the party declared to be in the wrong.
IN WITNESS WHEREOF, the party of the first*2089 part has caused these presents to be signed by its Chairman and the party hereto of the second part has hereunto set his hand and seal the day and year first above written.
(Signed) THE COUNTY OF NASSAU,
By HIRAM R. SMITH
Chairman, Board of Supervisors.
JOHN R. SPELMAN.
On August 16, 1920, a contract with similar provisions relating to a bridge over Mill Neck Creek was entered into.
On various dates the board of supervisors adopted resolutions respecting work on said bridges, of which the following is representative:
WHEREAS, a change of the weight of the 10 inch steel beams on the bascule draw span of the Long Beach Bridge and a change of motors from 20 to 15 horse power was recommended by the Strauss Bascule Bridge Company; and
WHEREAS, the contractor agreed to make a reduction of $168.00 for such change and weight of 10 inch beams, and a reduction of $200.00 for a change in horse power motors; and
WHEREAS, the County Engineer and the Consulting Engineer ordered and directed that such changes be made; therefore be it
RESOLVED, that the action of the County Engineer and the Consulting Engineer in ordering such changes and at the aforesaid amount of reduction*2090 and cost be, and the same hereby is, in all respects ratified and approved.
On February 21, 1921, the Civil Service Commission of the State of New York wrote the following letter:
*317 MR. JESSE MERRITT,
Clerk, Board of Supervisors,Nassau County, Mineola, N.Y.
DEAR SIR:
At a meeting of the Commission held on the 17th instant, I submitted your letters of January 31, February 8 and 16, together with information showing the qualifications of John R. Spelman for employment as consulting engineer, and resolution of the Board of Supervisors adopted August 16, 1920, in the matter of the employment of Mr. Spelman. In view of the information presented, it was
RESOLVED: That John R. Spelman, Rockville Centre, N.Y., employed by the Board of Supervisors of Nassau County as consulting engineer on Bayville Bridge, as authorized by the Board of Supervisors August 16, 1920, with compensation at the rate of 2% of cost, which is estimated at $529,250, $10,585, be and hereby is excepted from examination under the provisions of civil service rule VIII, subdivision 9, it appearing that the services rendered were of a professional, scientific, technical, or of an occasional*2091 and exceptional character, and that it would not have been practicable to hold an examination of any kind, the limit of compensation of $300 in any one year being suspended in this case.
I am directed by the Commission to advise you that it is understood as a condition of the above resolution, that no compensation will be requested by you, or the appointee concerned, for services beyond the time or in excess of the amount named, unless an extension of such time or increase of such amount has been applied for by you to the Commission.
The account of Mr. Spelman in the sum of $10,585 is returned herewith duly certified. A copy of this letter has been forwarded to Mr. Spelman for his information.
Yours very respectfully,
THE CIVIL SERVICE COMMISSION,
By JOHN C. BIRDSEYE, Secretary.
Petitioner, on June 26, 1922, submitted a claim to the County of Nassau for $32,617.98, in the following form (omitting computations):
THE COUNTY OF NASSAU, Dr.,
To John R. Spelman
Address: 405 Lexington Avenue, New York City.
To services as consulting Engineer on The Long Beach Bridges as per Schedule "Part D" of Contract with Board of Supervisors dated June 5th, 1920, 2% of total*2092 cost, of work (exclusive of engineering) together with corrected payments for parts A.B. and C. which were based on estimated cost.
| Total cost of work | $1,076,586.79 | |
| Compensation 8% of the total cost of work | 86,126.94 | |
| Less previous payments (based on estimated cost): | ||
| August 30, 1920 | $17,836.32 | |
| Oct. 27, 1920 | 17,836.32 | |
| Sept. 10, 1920 | 17,836.32 | |
| 53,508.96 | ||
| 32,617.98 |
The above claim was allowed and paid.
*318 On September 25, 1922, petitioner submitted a "claim" for services in connection with the Mill Neck Creek Bridge in the following form:
| To services as Consulting Engineer on The Bayville Bridge as per schedule, "Part C" of the contract with the Board of Supervisors, dated August 16, 1920, 2% of estimated cost of work. (Estimated cost - $529,250.00) | $10,585.00 |
Petitioner took no oath of office and was appointed for no fixed term. The relationship established by the contracts was not changed throughout the term of service.
In connection with his work the petitioner made the calculations and computations for the bridges, employed at his own expense draftsmen to make drawings and specifications and after the*2093 contracts were awarded supervised, with the aid of inspectors employed at his own expense, the construction thereof. Petitioner also employed at his own expense various engineers and assistant engineers and other persons. Petitioner was not reimbursed for the expenditures made by him for such draftsmen, engineers and assistants but paid the same from his own pocket.
The County of Nassau had a highway department, including a bridge department. Petitioner's plans were subject to the approval of the county superintendent of highways, the board of supervisors and the state highway department and certain changes therein were made by these agencies. Petitioner made periodic progress reports to the county superintendent.
During all the time the petitioner was engaged in the bridge work for Nassau County he was free to accept other employment. He personally maintained an office as a consulting engineer in New York City and actually performed some work for other persons and received pay therefor.
Petitioner owned an automobile and a launch, both of which he used in the work under the contracts without compensation therefor. He spent various sums personally for transportation*2094 to various places to inspect materials, for which transportation he was not reimbursed by the county.
Petitioner was free to use his own judgment and discretion on bridge work and was not interfered with by the county highway engineer or other officials. His work was similar to that ordinarily expected of a consulting engineer on a fee basis. A new agreement was entered into for each job.
OPINION.
VAN FOSSAN: The above findings of fact establish conclusively that petitioner was an independent contractor and not an officer or employee of a State or a political subdivision thereof. That he *319 was not an officer was inferentially admitted by petitioner's counsel. He took no oath of office, his employment was by contract and for no fixed term. See .
We believe it equally clear that he was not an employee of the State within the meaning of that term as used in the revenue acts. As stated by the Civil Service Commission in the letter quoted in the findings of fact, the services rendered were of a "professional, scientific, technical, or of an occasional and exceptional character." He was free to accept*2095 and did accept other employment. He maintained an office in New York from which he submitted his claims for services. He employed and paid with his own funds numerous assistants. He was free to use his own judgment and discretion in the work. In fact, the very term "consulting engineer" by which he was designated, implies an independence of control that is inconsistent with the relation of employer and employee. Each job of work was made the subject of a separate contract and all the terms and conditions of his employment were contained in the contracts so entered into. There was no continuity of employment from one position to the other and the tenure and duration of his employment were governed by the contracts and not by law. The facts in the case bring it clearly within the rule as laid down in See, also, ; affd., ; ; ; certiorari denied, *2096 ; .
Reviewed by the Board.
Decision will be entered for the respondent.