Arthur S. Flemming, Secretary of Health, Education and Welfare v. Ralph L. Rhoades

The issue in this case is whether the proceeds from the sale of seven coal mining leases are includible in self employment income for purposes of computing benefits under the Social Security Act. 42 U.S.C.A. § 301 et seq.

The appellee, Ralph L. Rhoades, dealt in coal rights in Pennsylvania and Ohio. Rhoades never mined. Usually he subleased his coal rights, receiving thirty cents per ton of the coal produced. He paid the owners ten or twenty cents per ton. The profit that he made was reported on his federal income tax returns as “royalties”.

In 1952 Rhoades sold his interest in seven leases to…