Court Opinion

ID: 9636702
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:40:16.648377+00
Date Added: 2024-06-11T18:09:48.379467
License: Public Domain

HUTCHESON, Circuit Judge (dissenting).
As stated in the majority opinion, plaintiff’s suit was “in equity, to restrain the collection of taxes upon the payment of admissions to athletic games.” This being so, I think it inescapable that its maintenance was forbidden by section 3224, Rev. Stat, U.S.C.A., title 26, § 154 (now 26 U.S. C.A. § 1543), and that the District Judge was right in refusing the restraining order and dismissing the bill.
I cannot agree with the majority that there are any special circumstances in this case which, within Miller v. Standard Nut Margarine Co., 284 U.S. 498, 52 S.Ct. 260, 76 L.Ed. 422, take it 'out of the operation of that statute. Especially can I not agree that appellant’s situation with reference to the admissions taxes it collected from its patrons but did not return and pay over, prevents its being distrained for them.
The view of the majority that it is such a case proceeds, I think, from two erroneous assumptions. The first is that appellant is not, as to the admissions taxes collected, obligated to make returns as to, and account for and pay them over as a taxpayer. The second is that it may not pay them over and then sue to recover them bade.
The statutes and regulations make it clear, I think, that appellant is, as to these admissions taxes collected, a taxpayer to the .extent, .at least, that as a taxpayer it is obligated to make returns, as a taxpayer it must pay over what it has collected, and as a .taxpayer it is subject to be distrained for these collections, if it fails to pay over.
Section 502 (a) (c) and (d), 44 Stat. 93, U.S.C.A., title 26, § 873; section 1102 (a), 44 Stat. 112, U.S.C.A., title 26, § 1254; section 3176, U.S.C.Supp. VII, title 26, § 1524, 45 Stat. 878; section 3184, U.S.C.A., title 26, § 104 (now 26 U.S.C.A. § 1545), make provision for collectors of admissions taxes making returns of and paying the taxes they collect. They authorize the commissioner or a collector to make the return, in case the collector of admissions fails to do so. They authorize the commissioner to determine and assess all taxes on returns so made and further authorize the collector to collect these taxes as other taxes.
The Regulations, Art. 43, provide that every individual, corporation, or association receiving any taxable payment for admissions must collect the tax from the person making such payment at the time the payment is made. Article 54 provides that the person making payment of the taxes so collected may file claim for the refund of the taxes. There is a special provision that a club, which seeks refund of the amount of taxes collected by the club from its members, should make its claim so as to show that it does so with authority. These provisions leave no room for doubt, I think, that when the association collected these admissions it did so under the obligation to return them and pay them over. They leave no doubt that it' has the right to file a claim for refund upon the ground it urges, that the tax is in effect a tax upon the state and therefore is not collectible, and that by the agreement on the tickets, its patrons have assigned the sums in controversy to it to have and keep them as its own, if the United States is not entitled to hold them. United States v. Johnston, 268 U.S. 220, 45 S.Ct. 496, 69 L.Ed. 925, cited by the majority as holding that appellant is not a taxpayer, does not, I think, so hold. The precise question was not before that court. It decided only that one who had collected admissions taxes had not collected them and did not hold them as agent of the United States so as to be guilty of embezzlement in not paying them over. It held that such a collector was a debtor, not a bailee; that the money for the tax was not identified at the outset, but was paid in with the price of the ticket, and nothing in the act required the collector to set up a separate fund in which the part due for admissions taxes should be put. On the question of taxpayer vel non, this that is said in the case, “reports are required only once a month, which does not *584look as if the Government were dealing with these people otherwise than with others answerable for a tax,” indicates that the collector was, rather than that he was not, regarded as a taxpayer. I think it clear that plaintiff having collected these sums, holds them prima facie at least as to the government, as tax moneys and is subject to pay them over, and upon failure to do so, to distrain for them as tax moneys, so that no injunction suit against their collection can be maintained.
I think it equally plain that appellant has an adequate remedy to pay and recover back.
Bunker Hill Country Club v. United States, 9 F.Supp. 52, and' Congressional Country Club v. United States, 44 F.(2d) 266, are Court of Claims opinions in refund suits brought by country clubs to recover back taxes they had collected from their members and had remitted to the collector under statutes requiring them to do so. In both of these cases it was held, against the claim that the tax was unconstitutional, that the tax was a valid charge on the members; that plaintiffs having collected the amounts for their members were “liable for the tax.” In both of them the refund was denied, not because plaintiffs had no standing to sue, but because the tax was valid.
Wourdack v. Becker (C.C.A.) 55 F.(2d) 840, does hold that one who, under no obligation or constraint to pay taxes assessed against others, had paid them, was a voluntary payee and could not recover them back. But see Moore Ice Cream Co. v. Rose, 289 U.S. 373, 53 S.Ct. 620, 77 L.Ed. 1265, holding that taxes erroneously paid may be recovered back, though there was neither protest nor duress. See, also, our case of White v. Hopkins, 51 F.(2d) 159, holding that for the purpose of suing for a refund, a taxpayer is “one who pays a tax.”
In Shannopin Country Club v. Heiner (D.C.) 2 F.(2d) 393, cited by the majority, a District judge does hold that a country club showing only that it has paid sums paid it by its members as taxes on dues, does not make a case for refund. We need not say whether that case was correctly decided, for it is not authority for a case like this, where appellant suing for a refund shows on the face of its claim for it that the money it sued for was, if not due the government as taxes, its own money by agreement of ticket buyers.
I think it plain, "then, that the District Judge was right in refusing the temporary injunction. Whether, as the majority hold, the dismissal of the bill was error, because the case should have been held for decision on the merits on its prayer for declaratory judgment, we need not determine, for the Federal Declaratory Act, Jud.Code § 274 (d), as amended by section 405, Revenue Act 1935 (28 U.S.C.A. § 400), does not now extend to controversies with respect to federal taxes.
Instead, then, of reversing the decree and remanding the cause for hearing on the merits, granting an interlocutory injunction meanwhile, I think we should have affirmed the decree throughout.
I therefore dissent.