(dissenting).
I think the judgments should be affirmed. The basic facts are not in dispute. The actions were tried to the court without a jury and the trial court on consideration of the evidence entered findings as follows:
“1. That at all times, and during the times of the performance by the several orchestras on the premises of the plaintiffs, the leaders of the orchestras exercised entire direction and control, and the right of control, over their orchestras and the members thereof, and the method and manner of doing the work. Such leader exercised and had the exclusive right to hire and fire such members, to contract for and pay their wages, and to keep all profits and sustain and pay such losses as occurred from the performances. Such leader organized, managed and controlled such orchestras as an independent organization for hire, and the true relationship as shown by the evidence was that such leaders were •independent contractors and the members of the orchestras their employees within the meaning of the Internal Revenue Statutes.
“2. The contract, Form B, was not entered into by fair negotiation between the parties, but upon demand of the musician’s union and the leaders of the orchestras that it must be entered into or no orchestra could be obtained, and it was required to be so executed with the avowed purpose of protecting the leader from taxes as an employer. It was required by the leader to be entered into as an anticipatory arrangement to escape taxation. There was no difference in the conduct and control of the orchestras, or the right to so conduct and control such orchestras, subsequent to June, 1941, or by reason of the Form B contract, than there was before that time, and the true relationship at all times as between the plaintiffs and such leaders was that the. latter were independent contractors.
“3. At the time of the execution of 'the contracts, Form B, neither the orchestra leader nor any of the sidemen intended thereby to transfer or give to the ballroom operators control of or the right to control the orchestra or the sidemen, or the method or manner of doing its or their work in any particular. And at the time of the execution of the contracts, Form B, the ballroom operators never intended thereby to have transferred to them or to receive or exercise the control of or the right to control the orchestras or any of the sidemen or the method or manner of doing its or their work in any particular.
“4. Considering all the facts and circumstances as disclosed by the evidence, including the contract Form B and its execution, none of the plaintiffs was at the time of the performance of the several orchestras on their premises the employer of the leader or of any of the members of the orchestras within the meaning of the Internal Revenue Statutes.”
See Bartels v. Birmingham, D.C., 59 F. Supp. 84.
It was within the province of the trial court to draw such inferences from the basic facts and circumstances as were reasonably deducible. In effect the court found that the contract did not represent the true relationship of the parties; that it was not entered into by fair negotiations; that the right to control as well as the actual control was intended to be retained and was retained by the leaders and that the orchestras as independent organizations for hire were inherently incapable of being controlled by the ballroom owners. Judge Donohoe reached substantially the same conclusion in Nebraska National Hotel Co. v. O’Malley, D.C., 63 F.Supp. 26. Having so found, the trial court in the instant case concluded that the leaders were independent contractors and that they rather than the ball-room owners were the employers of the musicians or sidemen. The findings of the court are presumptively correct and are not to be set aside unless clearly erroneous, and due regard must be given to the opportunity of the trial ■ court to judge of the credibility of the witnesses, and hence, the weight to be given their testimony. Rule 52(a), Rules of Civil Procedure, 28 U.S.C.A. following section 723c. A finding of fact is clearly erroneous only when it is not supported by substantial evidence, or is arrived at by the application of a wrong principle of law. Sears, Roebuck & Co. v. Talge, 8 Cir., 140 F.2d 395. We have held that substantial evidence is such *306“ ‘relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ” Archer v. Securities & Exchange Commission, 8 Cir., 133 F.2d 795, 799. In determining whether there is substantial evidence to support the findings of the trial court, this court should consider the evidence most favorably to the party prevailing (United States v. Perry, 8 Cir., 55 F.2d 819), and when different conclusions may reasonably be drawn from the evidence, the question as to which inference • should be drawn is for the trial court and not for the appellate court. Lu-zier’s, Inc., v. Nee, 8 Cir., 106 F.2d 130; Brooks v. Willcuts, 8 Cir., 78 F.2d 270. Even where the evidence is undisputed, if different conclusions may reasonably be drawn a question of fact is presented. F. T. Dooley Lbr. Co. v. United States, 8 Cir., 63 F.2d 284. It is conceded by the majority ópinion that,
“Previously, an orchestra assembled and directed by a leader and performing transient engagements for establishment owners, such as hotels, clubs, ballrooms, etc., for which the leader or his booking agent entered into the contracts, had been regarded as an entrepreneurial enterprise of the leader. Thus, in Williams v. United States, 7 Cir., 126 F.2d 129, certiorari denied 317 U. S. 655, 63 S.Ct. 52, 87 L.Ed. 527, such a leader had been held to be an independent contractor and to be liable for the payment of social security taxes on his orchestra-members.”
It is also conceded that there had been holdings by the State Courts that leaders of orchestras who directed, hired and fired, and were liable to the individual musicians for their services, were the employers of the orchestra members. It is therefore clear that the majority opinion is bottomed entirely upon the Form B contract entered into between the orchestra leaders and the ball-room owners. The government, to be sure, was not a party to this contract, and if it did not in fact create or change the relationship of the parties it should not be of controlling effect. The trial court took it into consideration together with all the evidence and circumstances and found that it did not change the relationship of the parties as it had theretofore existed, and that the orchestra leaders were the employers of the musicians, and were independent contractors so far as the ball-room owners were concerned. None of the sidemen or musicians, aside from the leaders, executed any of the contracts, and the contract terms designating or giving appellation to a relationship in form created by them, are not in any sense conclusive. Parties can not by the use of legal terms make 'mpotent the legislative arm of the government. The actual facts, not the names or terminology employed, must govern. Doll v. Commissioner, 8 Cir., 149 F.2d 239; Spillson v. Smith, 7 Cir., 147 F.2d 727; Matcovich v. Anglim, 9 Cir., 134 F.2d 834; Industrial Commission v. Northwestern Mutual Life Ins. Co., 103 Colo. 550, 88 P2d 560; Jack & Jill, Inc., v. Tone, 126 Conn. 114, 9 A.2d 497; Bertino v. Marion Steam Shovel Co., 8 Cir., 64 F.2d 409; Gulf Refining Co. v. Brown, 4 Cir., 93 F.2d 870, 116 A.L.R. 449; Sanford v. Goodridge, 234 Iowa 1036, 13 N.W.2d 40; Glielmi v. Netherland Dairy Co., 254 N.Y. 60, 171 N.E. 906; Nestle’s Food Co. v. Industrial Commission, 205 Wis. 467, 237 N.W. 117; In re Morton, 284 N.Y. 167, 30 N.E.2d 369; Griffiths v. Helvering, Commissioner, 308 U.S. 355, 60 S.Ct. 277, 84 L.Ed. 319; Moline Properties, Inc., v. Commissioner, 319 U.S. 436, 63 S.Ct. 1132, 87 L.Ed. 1499. This principle or rule is particularly pertinent in tax matters. Taxation .is a practical matter dealing with realities and the power of taxation is not to be restricted by mere legal fictions, but substance rather than form controls in applying tax laws. Ruben v. Commissioner, 8 Cir., 97 F.2d 926; Helvering v. Tetzlaff, 8 Cir., 141 F.2d 8; Paschal v. Blieden, 8 Cir., 127 F.2d 398; Weiss v. Stearn, 265 U.S. 242, 44 S.Ct. 490, 68 L.Ed. 1001, 33 A.L.R. 520.
Congress imposed a social security tax upon employers and any contractual devices seeking to shift that tax from the class designated by Congress must at least be subj ected to . scrutiny to determine whether the law is being circumvented. Thus, words contained in a contract providing that nothing in it should be construed to create the relation of employer *307and employee, have been held to be only “a slight element in assisting the court in a determination of the term ‘employment.’ ” Industrial Commission v. Northwestern Mutual Life Ins. Co., Colo., 103 Colo. 550, 88 P.2d 560, 565. In Willard Sugar Co. v. Gentsch, D. C. Ohio, 59 F.Supp. 82, 84, Judge Freed said:
“The written contract in evidence, in which it is specifically recited that the plaintiff shall exercise no control or supervision over Kolb except as to the results of his work; and the printed contract between Kolb and the plaintiff furnished on the required form to the Public Utilities Commission of Ohio, in which there is an assertion that Kolb is an independent contractor, constitutes some evidence as to the relationship between Kolb and the plaintiff.
“These recitals or written provisions in the contracts, however, are not convincing. It is entirely unimportant' what designation or terminology was used in these written instruments to denote the relationship of the parties, when the evidence persuasively shows that the relationship was that of employer and employee and not of contractor and contractee.”
The Collector in his brief states:
“We agree with the District Court that actual control was seldom, if ever, exercised by the taxpayer personally and we agree also that by the very nature of the services of professional musicians, who work together as a group, their performances are usually directed by the leader.”
It is insisted, however, that the “requisite right of control” could be placed in the ball-room operators if the parties so agree, and in effect make the orchestra leaders foremen of a group to conduct them in the performance of certain services. This view seems to form the basis for the conclusion reached by the majority opinion. It is stated in the opinion that,
“It is not necessary that the employer actually shall direct the manner in which the services are performed, but ‘it is sufficient if he has the right to do so’ (Treasury Regulations, supra).”
This reasoning overlooks the fact that the court found that the contract not only did not create the relationship of employer and employee, but was not intended so to do; that such relation did not in fact exist and that the so-called contract was a mere subterfuge by which it was sought to shift the burden of tax from that class designated by the Act , of Congress to others not so designated. This in fact was the sole purpose of this formal contract. As said by this court, speaking through Judge Stone, in Doll v. Commissioner of Internal Revenue, supra £149 F.2d 244]:
“We have here a written instrument which is sufficient to create a partnership, both at common law and under Missouri decisions. Schneider v. Schneider, 347 Mo. 102, 146 S.W.2d 584; Stone v. Guth, 232 Mo.App. 217, 102 S.W.2d 738. The judgment here is at most an adjudication of what was never in doubt. The existence of such a contract is not determinative of this tax issue. There remains the impact of the test of an analysis of ‘all the circumstances attendant on its creation and operation.’ ”
It is important to bear in mind that the government is not a party to this contract and the court has found on abundant evidence that it was entered into for the purpose of creating an appearance, not of creating a reality. The mere fact that there may be an abstract legal right of control as between the parties is not material because all the circumstances show that this abstract right was a mere subterfuge or fiction by which to avoid the act of Congress by shifting the tax from those intended by Congress to be subjected thereto. The evidence, including the attending circumstances, abundantly sustained the court in finding that the contract provision was intended to conceal the real relation of the parties as it was recognized by them and found by the trial court. We have in principle condemned such an instrument even as between the parties. Thus, in Burroughs Adding Machine Co. v. Bogdon, 8 Cir., 9 F.2d 54, 56, it is said:
“The instrument is obviously intended to convey the impression that it is a lease. It is designated ‘a machine lease’ and the words ‘lease,’ ‘lessor,’ ‘lessee,’ ‘rentals,’ and ‘rent’ are frequently employed therein. While the use of these terms has an un*308doubted weight in determining the character of the instrument, it is not controlling.”
Again, in E. C. Warner Co. v. W. B. Fo-shay Co., 8 Cir., 57 F.2d 656, 659, we said:
“So far as the form of the transaction is concerned, no usury is disclosed. Courts, however, are not bound by what the parties represent themselves to be doing, but will look beyond the mere form of the transaction to its substance. Usury is a moral taint, and no subterfuge, however cunningly devised, will be permitted to conceal it. If it appears that the transaction as disclosed by the testimony and the surrounding facts and circumstances was in substance a receiving or contracting for the receiving of usurious interest for a loan or forbearance of money, then, regardless of the forms or devices resorted to to conceal the character of the transaction, the parties thereto are subject to the consequences provided by the usury statutes.”
Even a deed of warranty will be held to be a mortgage if in fact given to secure an obligation.
The facts and circumstances which seem to me abundantly to sustain the court’s finding may be briefly referred to. The leaders of the orchestras were dependent for patronage upon a reputation for playing dance music in a distinctive style. These leaders selected the musicians, the instruments, and the musical arrangements. They trained the musicians and rehearsed the musical selections for the purpose of performing this distinctive style. In playing engagements — usually single evening performances — the leader led and directed the musicians so as to make certain that the production was of the type the public identified as his. The name of the leader was extensively advertised. The ball-room operator relied upon the orchestra leader to bring to his ball-room an organization capable of performing in a satisfactory manner and in the distinctive style recognized as belonging to that organization. The musicians or sidemen were selected and hired by the leader and were discharged by him. The ball-room operators never hired nor discharged any sidemen and they never had any conversation with the leader or sidemen about discharges. Salaries and wages of the sidemen and length of the terms of their employment were agreed upon by the leader when he made his arrangements with the sidemen and this was all done long before any appearance at the ball-rooms of the appellees. The compensation of the sidemen was usually a flat weekly rate which the leader was bound to pay regardless of whether or not the orchestra played engagements. Some leaders kept a regular payroll, showing the names of the sidemen and the amounts of their compensation. Appellees did not even know the amount of compensation paid the sidemen, nor the manner of payment. Indeed they had nothing whatever to do with determining the amount. Appellees paid a gross contract price for each engagement, which was determined through negotiations between them and the leader or the booking agent. The performance price was paid to the leader or his booking agent, never to the sidemen. Profits, after expenses were paid, belonged to the leader. If a loss resulted, he bore it. In the performance of his engagement each leader dictated such matters as the style of music, its length, tempo and volume. He owned the musical library of sheet music which was used by the orchestra, and designated the various selections to be played therefrom; determined the number of sidemen, prescribed and furnished the form of attire worn by the sidemen, provided the music racks and public address system, provided or arranged for the means of transportation to and from the 'particular engagement, determined the placing of the musicians on the bandstand or rostrum, conducted rehearsals prior to the engagement, and planned and directed the presentation of any featured numbers.
There is no evidence that appellees ever gave any directions or instructions to the leader or sidemen of any orchestra, or ever offered or assumed the right so to do. There is evidence that a leader might ask what patrons liked and the answer might be to mix them up, not to play all waltzes. This, however, is a far cry from control. It indicates rather that the bandleader wanted advice as to what a particular group might want played. At. most it *309showed cooperation. There was testimony that the operators told the leaders when to take intermissions. This is certainly unimportant and not inconsistent with the finding that the leaders were independent ■contractors, especially when considered with the mass of testimony going to show that the actual control and operation of the orchestra were in the leader. The trial court surely might reasonably have concluded that an independent contractor might in many things defer to the judgment of one who engaged him and in whose place he was performing. Even this meager testimony as to actual control was denied and the finding of the trial court should be conclusive on that question. Sidemen were often paid by a check on the leader’s account in the bank. Leaders of the orchestras testified that there was no difference or change in their operation after the Form B contract was in effect and prior thereto, in performing in appellees’ ball-rooms.
The quality of the music produced by these orchestras depended primarily on the ability of the individual musicians, the instrumentation, the selections played, and the skill of leadership. All these matters rested within the leader. The appellees were not skilled musicians and the testimony is uncontradicted that they never had .anything to do with hiring or firing the personnel of the orchestra.
The evidence is clear and convincing that the leaders exercised complete control of the means and manner of performance. They and they alone had the right to hire and fire; they and they alone determined the wages of the sidemen; and they and they alone actually paid the sidemen. The leaders were conducting an enterprise for profit, building up a name and reputation for themselves and their orchestras. The findings of the trial court that the leaders were in fact the employers is sustained not only by substantial evidence but by convincing proof. In fact, a finding that the contract correctly reflected the relationship of the parties would, I think, find no support in the evidence. No case'could more convincingly illustrate an agreement which purported to create a certain relationship while the actual conduct and operation of the parties established another. At most the contract was simply a circumstance to be considered in determining the relationship of the parties. It was not exclusive, and as said by the Circuit Court of Appeals of the Fourth Circuit, in Gulf Refining Co. v. Brown, 93 F.2d 870, 873, 116 A.L.R. 449:
“It is only by consideration of all of the facts pertaining to the relationship in any case, including the provisions of the contract, the actual conduct of the parties, and the conditions of the business in which they are engaged, that it can be determined whether the distributor is endowed with that control over his own methods and means of doing the work which is the test of an independent contractor.”
What Congress has commanded to be taxed must be taxed. Here the statute taxes employment and nothing else. Both the Commissioner and the taxpayer are subject to the statute and can not by adopting a fiction of the parties shift the burden of tax from those upon whom Congress has placed it.
The majority opinion brushes aside the findings of the trial court and bases its conclusion upon the single fact that there was in form a contract which purported to fix the relationship of the parties. This, I think, is not warranted. The findings of the court being sustained by abundant evidence, the judgments appealed from should be affirmed.