Hodoh v. United States, Civ. A. No. 32371.

• Decision Date: 16 August 1957
• Docket Number: Civ. A. No. 32371.
• Parties: John HODOH, a.k.a., John D. Hodoh, Plaintiff, v. The UNITED STATES of America, Defendant.
• Court: U.S. District Court — Northern District of Ohio

153 F. Supp. 822

John HODOH, a.k.a., John D. Hodoh, Plaintiff, v. The UNITED STATES of America, Defendant.

Civ. A. No. 32371.

United States District Court N. D. Ohio, E. D.

August 16, 1957.

Thomas S. E. Brown, Akron, Ohio, for plaintiff.

Sumner Canary, U. S. Atty., Cleveland, Ohio, for defendant.

WEICK, District Judge.

This is an action for refund of excise taxes on wagers, the occupation of wagering, and penalties thereon, claimed to have been illegally, erroneously and unlawfully assessed and collected under I. R.C.1939, § 3285 et seq., § 2707, 26 U. S.C.A. (I.R.C.1939), § 3285 et seq., § 2707.

Police officers of the City of Akron, acting under a search warrant issued by the Municipal Court of that city, searched plaintiff's residence on December 7, 1953 and found evidence tending to prove that he was engaged in the numbers business. The officers immediately called Internal Revenue agents who went to plaintiff's home where the search was being conducted.

The police officers found the following on the premises:

(a) A numbers slip

(b) $900 in $1 bills hidden in a crisper in plaintiff's ice box in the kitchen

(c) About $200 in change in a bag in a waste basket

(d) About $9,000 in cash in a safe in plaintiff's bedroom

(e) Money wrappers

(f) Papers littered about the dining room table

When the police arrived at plaintiff's residence and knocked on the front door, plaintiff came to the door, but did not open the door for several minutes, during which time plaintiff went upstairs. When the police were admitted to the house, they heard the upstairs toilet as it was flushing.

The police remained in the house for nearly three hours during which time plaintiff's telephone, which had an unlisted number, rang repeatedly.

Lieutenant of Detectives Carroll Cutright answered the telephone in plaintiff's presence and thereby obtained the names and addresses of numbers solicitors who were calling to advise plaintiff of wagers which they had collected and desired to turn in. The plaintiff was taken by the officers to the residence of Lilly Frambrough, one of said solicitors, where numbers slips and money collected for plaintiff on wagers was seized and she was arrested. Another solicitor was also arrested.

The Akron police seized the money and other evidence at plaintiff's home. Plaintiff and the solicitors were charged in the Municipal Court of Akron with violation of the wagering laws of the city.

A jeopardy assessment was made for the 10% tax on wagering which, with penalty and interest, amounted to $8,408.48, and a tax assessed on plaintiff's wagering occupation, which, with penalty and interest, amounted to $94.82.

A levy for the tax on wagering was filed with the Chief of Police of Akron who turned over to the Director of Internal Revenue in payment thereof $8,408.48 of the funds which had been seized. The Chief of Police returned to plaintiff the balance of his funds pursuant to an order of the Municipal Court.

Plaintiff's automobile was also seized by the Revenue Agents for the occupational tax. Plaintiff paid said tax under protest and his automobile was then released.

He filed claims for refund of both taxes and upon denial of the claims filed this suit.

The claims for refund were sufficiently broad to embrace the causes of action set forth in the complaint.

Plaintiff claims that he was not engaged in the occupation of wagering and did not receive or collect any wagers and, therefore, owes nothing to the Government.

Upon trial in the Municipal Court plaintiff was acquitted of the charge of wagering. The solicitors plead guilty and were fined.

Plaintiff's acquittal in the Municipal Court of the charge of wagering is not determinative of the issues here. There was no identity of parties and, therefore, the doctrine of res judicata does not apply. Moreover, the burden of proof in the cases is different. In the Municipal Court the burden of proof was upon the prosecution to establish the charge of wagering beyond a reasonable doubt. In the present case the burden of proof is upon the taxpayer to establish his claim by a preponderance of the evidence.

Plaintiff testified on direct examination, by his own counsel, that he had been previously arrested on July 12, 1949 for possession of lottery slips and fined $10; that he was again arrested for possession of lottery slips and fined on October 26, 1949; that he was again arrested on the same charge on January 9, 1951 and sentenced to 10 days imprisonment in the Workhouse.

Plaintiff testified that he had been a messenger for his father who was engaged in the business. He testified that at no time since 1951 had he been engaged in the numbers business or in receiving or accepting wagers and denied that he was so engaged on the date of his arrest on December 7, 1953.

The overwhelming evidence, however, establishes the fact that, contrary to plaintiff's testimony, he was actually engaged in the numbers business at the time of his arrest on December 7, 1953.

The delay in opening the door for the officers, the flushing toilet, the numbers slip, $900 in one dollar bills concealed in the ice box, $200 change in the...