Akers v. Scofield, 12176.

• Decision Date: 23 April 1948
• Docket Number: No. 12176.,12176.
• Citation: 167 F.2d 718
• Parties: AKERS et ux. v. SCOFIELD.
• Court: U.S. Court of Appeals — Fifth Circuit

167 F.2d 718 (1948)

AKERS et ux. v. SCOFIELD.

No. 12176.

Circuit Court of Appeals, Fifth Circuit.

April 23, 1948.

Robert Ash, of Washington, D. C., for appellants.

Melva M. Graney and Sewall Key, Sp. Assts. to the Atty. Gen., Theron L. Caudle, Asst. Atty. Gen., and Henry W. Moursund, U. S. Atty., of San Antonio, Tex., for appellee.

Before HUTCHESON, HOLMES, and WALLER, Circuit Judges.

WALLER, Circuit Judge.

Mrs. Dora Roberts, a widow, the possessor of many acres, much money, great age, and limitless credulity, made a deal with James A. Akers whereby she agreed to, and did, advance large sums of money to him for the purpose of acquiring some maps which Akers and his confederate, Forrest, represented were in existence in Mexico and which would reveal the location, on her ranch, of much buried gold.

The treasure hunt was initiated by Mrs. Roberts paying Akers $1,600 for the purpose of enabling him to go to Mexico and to purchase the first map. In due course he produced a map, and by its pretended use directed the treasure seekers to a designated spot on the Roberts ranch whereat a quantity of metal bars, resembling gold, was dug up. Akers had made, or caused to be made, the map out of his imagination and the "gold" bars out of brass.

It was agreed that the widow would bear all expenses of the enterprise, and that whatever treasure was recovered would be divided equally between Akers and the widow, but due to the federal restrictions against the possession of gold it was also agreed that the bars would be kept in a closet in the home of Mrs. Roberts until the day arrived that the gold could be converted into spending money. Akers divided the "expenses" so received with his confederate, Forrest. Thereafter, Akers reported that he had located another map in Mexico, but this time it would take $4,000 to acquire it. This process was repeated on numerous occasions and more maps were obtained, and more bars were located, unearthed, and stored in the widow's closet against the day when gold bars would not be contraband. During the period from 1932 through 1936 the widow advanced to Akers under such circumstances and for such purposes a total of $272,200.

Eventually the time arrived when Akers represented to the widow that gold could be sold in Galveston and while proceeding toward that city in a truck containing the bars, misfortune overtook him — according to his report — and he was hijacked — robbed of the entire load. That was in February of 1935. In September of 1936 Mrs. Roberts discovered the skulduggery and ceased to advance any further money. Chagrined at having permitted herself to be so defrauded, she failed to report the transactions to any law enforcement agency or to demand a return of the money or to institute any action for its return. The statute of limitations of Texas would have barred her from taking any legal action after September 27, 1938.

Akers and his wife filed separate individual income tax returns for the calendar year 1936, each reporting net community income, but no returns were filed by Akers or his wife for the years 1932-1935, inclusive, and in no return was there included the money received by Akers from Mrs. Roberts. In passing, it may be noted that he was sentenced to the penitentiary for this omission. Income taxes were assessed, however, by the Commissioner. These taxes were reluctantly paid and this suit brought against the Collector of Internal Revenue of the First District of Texas to recover the taxes on the theory that they were illegally required of him. From a judgment denying recovery this appeal has developed.

The facts are stipulated. The contention of Akers is that the amount received by him from Mrs. Roberts was not a "gain derived from capital, from labor, or from both combined," nor a "profit gained through a sale or conversion of capital assets."¹ He urges here that the legal principle involved is similar to that in our case of McKnight v. Commissioner, 5 Cir., 127 F.2d 572, and in the case of Commissioner of Internal Revenue v. Wilcox, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752, 166 A.L.R. 884, wherein defenses against liability for income taxes were sustained on the theory that the funds involved in those cases were obtained by embezzlement whereby no title ever passed to the alleged taxpayer.

The Commissioner insists that this case is distinguishable from the McKnight and Wilcox cases in that the title to embezzled funds does not pass to the embezzler, whereas in the present case Akers was guilty of swindling, and that the title to the money so obtained passed to him under the statutes of Texas.

The lower Court stated:

"This is not a case of embezzlement; it is one of swindling. When...