Marion B. Folsom, Secretary of Health, Education and Welfare v. Robert Poteet, as of the Estate of Ralph B. Thorbus, Deceased

For many years Ralph B. Thorbus leased as lessee in Los Angeles what appears to have been a rather shabby apartment-rooming house. He rented out the apartments therein to people on a weekly and monthly basis. Some occupants were on a daily basis.

For the years 1951 and 1952 he paid the self employment tax. As a consequence of amendments to the Social Security Act made in 1950, he was eligible in 1953 for social security benefits for old age assistance if the operation he conducted classified as a hotel or an apartment hotel. He was not if he was just operating an apartment house without more.

He lost the lease on the building and applied for the old age insurance benefits. He exhausted the administrative procedures of the Department of Health, Education and Welfare, where he was consistently ruled against on the ground that he was just renting real estate to others.

The facts were all presented to the administrative agency from the mouth of Thorbus. Its findings indicate complete credence was given to all facts related by him. As the law permits, he sought review of the record in the United States District Court. There he prevailed. This appeal by the secretary followed.

In…