Court Opinion

ID: 6846293
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:29:34.692352+00
Date Added: 2024-06-11T16:04:58.946540
License: Public Domain

WILLIAMS, Judge
(dissenting).
The taxes in controversy were imposed under section 900 (5) of the Revenue Aet of 1918 (40 Stat. 1122). Forty-two articles are enumerated in the statute as subject to the tax, thirty-one of which are paraphernalia used in outdoor sports or games, and eleven of which are used in indoor sports or games. All the enumerated articles are used in sports or games involving human skill, ability, endurance, and competition. Following the enumeration of specific articles subject to the tax is the generalizing phrase “games and parts of games (except playing cards and children’s toys and games) and all similar articles commonly or commercially known as sporting goods.”
Slot machines are not among the articles enumerated in the statute, but the defendant contends, and the prevailing opinion holds, they are taxable under the general phrase “games and parts of games.” It is said they are admittedly gambling devices, and as such are included within the meaning of the phrase “games and parts of games.”
It is a familiar and universally accepted rule of statutory construction that, where an enumeration of specific things is followed by some more general word or phrase, such word or phrase is held to refer only to things of the same kind. United States v. Phez Co. (C. C. A.) 28 F.(2d) 106; United States v. Nichols, 186 U. S. 298, 22 S. Ct. 918, 46 L. Ed. 1173; United States v. Chase, 135 U. S. 255, 10 S. Ct. 756, 34 L. Ed. 117; Monroe Cidar Vinegar & Fruit Co. v. Riordan (C. C. A.) 280 F. 624.
The phrase “games and parts of games” is immediately preceded by an enumeration of specific articles, every one of which is used in well-known sports and games. There is not the slightest similarity between the plaintiffs slot machine and any one of the articles enumerated. A slot machine is a gambling device pure and simple, and can be used for no other purpose. This is not true of any of the other articles named, all of which are used either in outdoor athletic sports and contests or in social games such as are found in homes or clubs. None of the articles in the preceding enumeration are used in “games” as that term is defined in statutes directed against gaming and gambling. No one thinks of tennis rackets, skates, snowshoes, golf clubs and balls, chess and checker boards and pieces, or of any of the articles named as being gambling devices, and by no stretch of imagination can a slot machine, such as we are dealing with here, be considered as being of the same class or kind of article as any of those specifically enumerated.
*480Applying the rule ejusdem generis, the generalizing phrase “games and parts of games,” following an enumeration of specific articles, can include only within its meaning like articles to those enumerated. Conceding that the plaintiff’s slot machines are “games” within the meaning of statutes directed against gambling, as contended by defendant, they are, under the rule, entirely outside the limitations imposed by the enumerated articles on the general phrase “games and parts of games,” and are not subject to the tax.
Another familiar rule of construction is that the meaning of a doubtful word or phrase appearing in a statute may he ascertained by reference to the associated words, those following as well as those which precede such word or phrase. United States v. Louisville & Nashville R. Co., 236 U. S. 318, 35 S. Ct. 363, 59 L. Ed. 598; Virginia v. Tennessee, 148 U. S. 503, 13 S. Ct. 728, 37 L. Ed. 537; Patton v. United States, 159 U. S. 500, 16 S. Ct. 89, 40 L. Ed. 233.
The phrase “games and parts of games” is immediately followed by “except playing cards and children’s toys and games, and all similar articles commonly or commercially known as sporting goods.” These words are explanatory of the intent and purpose of section 900 (5) to impose the tax only on such articles as are commonly or commercially known as sporting goods. In fact, this section of the Revenue Act of 1918 has been commonly known as the sporting goods section of the act. The articles made subject to the tax are referred to as “sporting goods” in the report (No. 767, p. 34) of the Ways and Means Committee of the House and in the report of the Senate Finance Committee (No. 617, p. 54) in connection with the consideration of the act by Congress at the time of its passage. The Committee on Finance of the Senate, in reporting the Revenue Act of 1921, said in reference to the change made in section 900 (5) of the Revenue Act of 1918 (S. Report No. 275, p. 28): “ * * * The reduction of the tax imposed by subdivision 5 upon sporting goods from 10 to 5 per cent.”
The Treasury Department in article 18 of Regulations 47, revised, enumerates nearly two hundred different articles as being subject to the tax imposed by section 900 (5) of the 1918 Revenue Act. All of the articles enumerated are such as are commonly used in athletic sports, and are of a like kind to those specifically named in the aet.1 None of the articles so enumerated are in any respect similar to the slot machines in question, and none of them are articles used in “games,” as that term is used in criminal statutes against gambling. It is quite clear from the regulations that the Treasury Department interpreted section 900 (5) as making sporting goods and nothing else subject to the tax, I think this interpretation of the law is correct. The phrase “games and parts of games” must be construed in connection with the phrase which follows, “and all similar articles commonly or commercially known as sporting goods.” No article other than those specifically enumerated in the act is subject to the tax, unless such article is of a similar kind to those named, and is one commonly and -commercially known as “sporting goods.”
The commissioner of the court to whom the instant case was referred to take the proof and report the facts included in his report the following:
“During the period involved herein coin-operated machines of the several types here-inabove referred to were not sold at representative stores and establishments which specialized in the sale of sporting goods, and they were not commonly or commercially regarded as sporting goods.”
The defendant filed no exceptions to this statement of fact. It is fully sustained by proof, is material to the issue presented, and I think should be incorporated in the court’s findings of fact.
It is my opinion that the Commissioner ' of Internal Revenue was without authority under the statute and the applicable regulations to impose and collect the taxes in question, and that the plaintiff should he given a judgment for the amount of sueh taxes, with interest thereon.