Friday, November 22, 2013

Stark v. Flemming case brief

Stark v. Flemming case brief summary
283 F.2d 410 (1960)


CASE SYNOPSIS
Appellant social security beneficiary challenged a judgment of a United States District Court in favor of appellee federal agency, which found that a corporation established by appellant was a sham for purpose of qualifying appellant for social security payments.

CASE FACTS
Appellant social security beneficiary contested a ruling of appellee federal agency and the district court that the corporation in which she placed her assets was a sham.

DISCUSSION

  • The court found that appellant had placed her assets of a farm and a duplex house in a corporation and drew a small salary with the result being her qualification for social security payments. 
  • Because appellant had adhered to corporate procedures, the court concluded that the corporate arrangement was not a sham and reversed the denial of benefits on that basis. 
  • The court, however, remanded because appellee could reappraise the salary appellant was receiving and determine a reasonable salary for her services.
CONCLUSION
The court reversed the judgment for appellee federal agency because the corporation in which appellant social security beneficiary had placed her assets was not a sham. The court remanded for a reappraisal of appellant's salary because appellee could determine a reasonable salary for appellant.


Recommended Supplements for Corporations and Business Associations Law

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