1. Under the provision of the "Revenue Act of 1918," taxing
admission fees (Feb. 24, 1919, c. 18, § 800, 802, 40 Stat. 1057,
1120), a person who has collected such fees at a pubic exhibition
and is required to pay the tax to the United States is a debtor,
and not a bailee, so that failure to pay the tax is not indictable
as an embezzlement of money of the United States within § 47
Criminal Code. P.
268 U. S.
226.
2. A person who collects admission fees to boxing matches is
liable to punishment under § 1308b of the above Revenue Act for
failure to pay the taxes to the United States if he really acts on
his own behalf in giving the exhibitions, collecting the fees and
undertaking to pay taxes, even though, to comply with a state law,
the exhibitions are given nominally by a corporate licensee of
which he is technically but the agent. P
268 U. S.
227.
290 F. 120 reversed.
Certiorari to a judgment of the circuit court of appeals which
reversed a sentence of the district court in a criminal prosecution
for failure to pay over admission fees taxes and for
embezzlement.
Page 268 U. S. 226
MR. JUSTICE HOLMES delivered the opinion of the Court.
The respondent, Johnston, was convicted on an indictment
charging in separate counts a failure to pay over the tax upon
admission fees received at certain boxing matches and a failure to
make return to the collector of internal revenue of the money so
received, contrary to the Act of February 24, 1919, c. 18, §§ 800,
802, 1308(b), 40 Stat. 1057, 1120, 1143. He also was convicted
under § 47 of the Criminal Code of embezzling the amounts collected
as taxes on the same occasions. Act of March 4, 1909, c. 321, § 47,
35 Stat. 1097. The judgment was reversed, and the district court
was directed to dismiss the indictment by the circuit court of
appeals. 290 F. 120. A writ of certiorari was granted by this Court
as the decision was said to be of grave importance to the
administration of the revenue laws. 263 U.S. 692.
So far as the charge of embezzlement goes, we think that the
court below and the intimation of the Treasury Department that it
followed were clearly right. However it may have been under other
statutes (
United States v.
Thomas, 15 Wall. 337), it seems to us that, under
this law, the person required to pay over the tax is a
Page 268 U. S. 227
debtor, and not a bailee. The money paid for the tax is not
identified at the outset, but is paid with the price of the ticket
that belongs to the owner of the show. We see no ground for
requiring the ticket office of a theater to create a separate fund
by laying aside the amount of the tax on each ticket and to keep it
apart, either in a strong box or as a separate deposit in a bank.
Reports are required only once a month, §§ 802, 502, which does not
look as if the government were dealing with these people otherwise
than with others answerable for a tax. Further argument seems
unnecessary upon this point.
On the other counts, we are of opinion that the court below was
wrong. We do not grant a certiorari to review evidence and discuss
specific facts. But the court seems to have regarded the formal
relations of Johnston to the Central Manhattan Boxing Club, Inc.,
made necessary by the laws of New York, as conclusive upon his
relations to the United States. The laws of New York permitted a
license only to a corporation, and so Johnston may have assumed the
technical position of agent and manager for the club. But if, as a
matter of fact, all this was machinery to enable Johnston to give
exhibitions, collect the entrance fees, and make himself liable for
the tax, it properly might be alleged that he collected the fees
and, if he willfully failed to pay, that he refused and failed to
pay the tax. As the jury found Johnston guilty, although with an
earnest recommendation of mercy, we are of opinion that the
sentence and judgment of the district court, which was much less
than it might have been under § 1308(b), must be affirmed.
Judgment of the circuit court of appeals reversed.
Judgment of the district court affirmed.
