REGENTS OF UNIVERSITY SYSTEM OF GEORGIA v. PAGE
No. 7784.
Circuit Court of Appeals, Fifth Circuit
Jan. 20, 1936.
81 F.2d 577
As to the presumption of suicide, the the court told the jury this presumption is not evidence; it is rebuttable, it yields to evidence. If it be considered that there was abstract error in giving the instruction complained of [but see Travellers’ Ins. Co. v. McConkey, 127 U.S. 661, 8 S.Ct. 1360, 32 L.Ed. 308; New York Life Ins. Co. v. Ross (C.C.A.) 30 F.(2d) 80] it was not reversible error. The charge here was very different from that condemned in Travelers’ Ins. Co. v. Wilkes (C.C.A.) 76 F.(2d) 701; Fidelity & Casualty Co. v. Driver (C.C.A.) 79 F.(2d) 713.
Neither was there reversible error in refusing defendant‘s charge on voluntary and reckless exposure to danger, in giving the charge, or in making the remarks the court made in regard to that charge. Indeed, wе think the court‘s charge on that issue was in accordance with settled law.
We find no error in the judgment. It is affirmed.
SIBLEY, Circuit Judge (dissenting).
I agree that it is a reasonable theory of the evidence that Pratt, while worried and abstracted, drove upon the crossing without noticing the approach of the train and without consciously taking a risk to take which would exclude accident. But under that theory he could not have obeyed the Mississippi law which in positive terms, under penalty as for a misdemeanor, forbids anyone on the highway going upon a railroad crossing without stopping at the sign erected fifty feet from it, or between the sign аnd a point ten feet from the nearest track, and looking for the approach of a train. The purpose of the law is to prevent such an occurrence as this. A death while disobeying this law is clearly one “caused directly or indirectly * * * by the insured‘s violation of any law,” which is excluded by the policy from the insurance. Travelers’ Protective Association v. Prinsen, 291 U.S. 576, 577, 54 S.Ct. 502, 78 L.Ed. 999. Pratt knew the crossing was there, for he had crossed it two hours before and had been in sight of it ever since. If he had stopped and looked while approaching it, as required by the law, he must have seen the train. All the evidence indicates that he did nоt, and the only escape from the theory of suicide is that he did not. The verdict should have been ordered for the defendant.
On Petition for Rehearing.
PER CURIAM.
As neither of the judges who concurred in the judgment of the court in the above numbered and entitled cause is of the opinion that the petition for rehearing should be granted, it is ordered that the said petition be, and the same is hereby, denied.
Marion Smith and M. E. Kilpatrick, both of Atlanta, Ga., for appellant.
M. H. Eustace, Sp. Asst. to Atty. Gen., and M. Neil Andrews, Asst. U. S. Atty., of Atlanta, Ga., for appellee.
Before FOSTER and HUTCHESON, Circuit Judges, and HOLMES, District Judge.
HOLMES, District Judge.
This suit in equity was commenced in the District Court of Northern Georgia, by the Board of Regents of the University System of Georgia against the Collector of Internal Revenue, to restrain the collection of taxes upon the payment of admissions to athletic games, the proceeds of which inure wholly to the University of Georgia and the Georgia School of Technology, branches of said system. The appellant was created by an act of the Legislature of Georgia, in 1931 (Laws Ga. 1931, p. 20) for the purpose of having supervision of the public higher institutions of learning in the state, among which were said University and School. From the bill of complaint, its amendments, and exhibits, it appears that during the time involved in this controversy athletic games or exhibitions, participated in by students, were held upon the athletic fields of each of said institutions. The public was admitted to such
The Commissioner of Internal Revenue having ruled that state universities must collect the tax on admissions to football games, the appellant made a return of admissions so collected, paid an amount thereon as a tax to the collector for the proper district (such amount not being involved in the present suit), and then filed a claim for refund to cover the amount, but the claim was denied on the ground, among others, that the tax had not been imposed on the claimant, but on others from whom the admissions were collected, and that, not being the taxpayer, appellant could not contest the payment. Warrants of distress and notices of levy having been served by appellee upon the appellant for subsequent taxes, alleged to have been collected during the months of September and October, 1934, from the sale of admissions to games played at the University of Georgia and the School of Technology, and 10 per cent. of the amounts so collected and dеposited in local banks having been levied upon by the collector, the appellant filed its bill praying that the appellee be restrained from proceeding further with said attempt to collect said taxes, for a declaratory judgment that no taxes were due, and for general relief.
The court below issued its rule to show cause why the relief prayed for in the bill should not be granted, to which appellee responded by filing a motion to dismiss the bill. This motion was sustained and a decree of dismissal followed, the court holding, as contended by appellee, that an injunction is prohibited by
The contentions of appellant are that it is a department of the state government, performing a sovereign function; that the University of Georgia and School of Technology have as parts of their educational curricula athletic departments for the instruction of their students in physical training and education; that the athletic events for which the public is charged admission, which include athletic contests between students of the University of Georgia, the School of Technology, and other colleges, are parts of their educational program; that all funds derived from the sale of such admissions are the property of appellant; and that such admissions are exempt from the payment of the federal admissions tax. The appellant further claims that the amounts for which warrants of distress have been issued are not for taxes assessed against a taxpayer, but for items of a debt owing by an alleged agent; that the money or choses in action which have been levied upon by distraint are not the property of the taxpayer; that the United States government has no lien thereon and no right to seize it by summary process; and that
We think the court erred in holding that the appellant had voluntarily acted as agent of the federal government in collecting the taxes. If the appellant acted as agent, it did so under coercion brought about by the fear of being mistaken in its expressed opinion that it could not be required to collect taxes for the federal government, and that no taxes were due, because the exhibitions, admissions to which
The only other recourse, except the one followed by appellant, was to disregard the law as construed by administrative officers, and to fail or refuse to comply with it and regulations promulgated thereunder by the Commissioner of Internal Revenue. This would have involved financial hazards and risks of criminal prosecutions which no prudent, law-abiding citizen should be required to incur. See
Section 500 (d). “Whoever sells an admission ticket or card on which the name of the vendor and price is not so printed, stamped, or written, or at a price in excess of the price so printed, stamped, or written thereon, is guilty of a misdemeanor, and upon conviction thereof shall be fined not more than $100.00.” 44 Stat. 91, 92.
Section 1114 (b). “Any person required under this Act to collect, account for and pay over any tax imposed by this Act, who willfully fails to collect or truthfully account for and pay over such tax, and any person who willfully attempts in any manner to evade or defeat any tax imposed by this Act or the payment thereof, shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereоf, be fined not more than $10,000, or imprisoned for not more than five years, or both, together with the costs of prosecution.” 44 Stat. 116.
Section 1114 (f). “The term ‘person’ as used in this section includes an officer or employee of a corporation or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.” 44 Stat. 116, 117.
The course taken by appellant seems to us most appropriate. The money was collected by the respective athletic departments under an agreement with the purchasers that, if no tax was due by the University or School of Technology, the amounts so collected should be added to the price of admission and retained by the appellant. There was nothing unfair or illegal about such an agreement. It was one of which the United States could not reasonably complain. If the tax was due by appellant or it was legally required to collect the same, it is the duty of the collecting agent to pay it over; if the admissions were immune from federal taxation, there was no valid agency and certainly no obligation to pay anything over to the appellee. We find nothing in the conduct of the Board of Regents to estop it from standing upon its constitutional rights and asserting the invalidity or inapplicability of the alleged tax.
Let us now look at the remedy pursued by, and inquire what remedy is available to, appellee. If his contention is correct, the appellant voluntarily acted as agent in the collection of the tax and became the debtor of the United States. The money collected does not belong to the gov-
In the present case, there is no special statute which authorizes the assessment by the commissioner against the appellant or its branches of admissions tax which it may have collected, and none which authorizes the collection thereof by seizure and sale of appellant‘s property under warrant of distraint. The assessment in this case by the commissioner was evidently made under
The petition alleges the incorporation of appellant as a governmental instrumentality for educational purposes; the promotion of physical training as an integral part of its educational activities, including intercollegiate athletic contests, such as football; and its collection of fees for ad-
According to the contention of appellee, the courts are closed to appellant, in most difficult circumstances. It must either surrender its claims of immunity from federal taxation or incur the risk of committing a felony through its officers or еmployees. It cannot pay the alleged tax and seek a refund, because the burden of payment is borne by the purchasers of the tickets. For the same reason it cannot recover in an action at law. Yet it is clear from any view of the case that appellant itself owes no tax. Its sole liability, if any, is a duty to collect and faithfully account for it. It denies having made any collection thereof, while admitting having set aside out of its admission fees an amount, at least, equal to the taxes claimed. The motion to dismiss admits every allegation of fact in thе petition which is well pleaded. Like a demurrer, the motion must be based entirely upon facts stated in the bill of complaint. It cannot invoke in its support any fact whatever which is not contained therein, except one of which the court takes judicial knowledge.
We deem it premature at this time to make any announcement on the asserted claim of liability for the tax or obligation to collect it. A constitutional question of great importance is involved. The correct answer to it is more aptly to be found in a painstaking examination of the facts and circumstances in evidence than in hair-splitting technicalities of pleading, however necessary such rules may be ordinarily. The law arises out of the facts in all cases, but, in determining what instrumentalities of a state are exempt from taxation by the federal government, the maxim requires special emphasis. Legal formulas are helpful to classify state activities, but in close cases it becomes necessary to examine the particular facts to determine whether the special instrumentality falls within the category of private business subject to tax or govеrnmental function exempt therefrom. Under our dual system of constitutional government the limitation upon the taxing power must be given a practical construction so as not “to impair either the taxing power of the government imposing the tax * * * or the appropriate exercise of the functions of the government affected by it.” Metcalf & Eddy v. Mitchell, 269 U.S. 514, 524, 46 S.Ct. 172, 174, 70 L.Ed. 384; South Carolina v. United States, 199 U.S. 437, 461, 26 S.Ct. 110, 50 L.Ed. 261, 4 Ann.Cas. 737; Flint v. Stone Tracy Co., 220 U.S. 107, 172, 31 S.Ct. 342, 55 L.Ed. 389, Ann.Cas. 1912B, 1312. See, also, Fox Film Corporation v. Doyal, 286 U.S. 123, 52 S.Ct. 546, 76 L.Ed. 1010; Willcuts v. Bunn, 282 U.S. 216, 51 S.Ct. 125, 75 L.Ed. 304, 71 A.L.R. 1260; Ohio v. Helvering, 292 U.S. 360, 54 S.Ct. 725, 78 L.Ed. 1307; Gillespie v. Oklahoma, 257 U.S. 501, 42 S.Ct. 171, 66 L.Ed. 338; Kentucky v. Dennison, 24 How. 66, 16 L.Ed. 717; Indian Motocycle Co. v. United States, 283 U.S. 570, 51 S.Ct. 601, 75 L.Ed. 1277.
We think the motion to dismiss should have been overruled, a preliminary injunction issued, an answer required to be filed, and the case heard upon the merits. Pending such hearing, an interlocutory injunction should issue restraining the defendant from attempting to collect the alleged taxes, debt, or penalties, except by due proceedings in a court of competent jurisdiction.
Reversed and remanded for further proceedings not inconsistent with this opinion.
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
I cannot agree with the majority that there are any special сircumstances 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 рay them over and then sue to recover them back.
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.
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 thе 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 statе 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 is said in the case, “reports are required only once a month, which does not
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 governmеnt 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,
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.