Johnston v. United States

• Decision Date: 02 April 1923
• Docket Number: 175.
• Citation: 290 F. 120
• Parties: JOHNSTON v. UNITED STATES.
• Court: U.S. Court of Appeals — Second Circuit

290 F. 120

JOHNSTON v. UNITED STATES.

No. 175.

United States Court of Appeals, Second Circuit.

April 2, 1923

George E. Coughlin and Arthur N. Sager, both of New York City, for plaintiff in error.

William Hayward, U.S. Atty., of New York City (Peter J. McCoy, Jr. and John E. Joyce, both of New York City, Asst. U.S. Attys of counsel), for the United States.

Before HOUGH, MANTON, and MAYER, Circuit Judges.

MANTON Circuit Judge.

The Central Manhattan Boxing Club, Inc., is a New York corporation. It entered into an agreement on November 26 1920, the material parts of which were that the plaintiff in error, desiring to exclusively conduct boxing matches as the 'agent, matchmaker, and manager of the Manhattan Athletic Club under the charter and license held by it for the period of one year,' agreed to pay the club $750 a month, except for the months of July and August, 'for the aforesaid exclusive arrangement.' He agreed to hold at least one boxing match each month, and agreed to pay the club $400 one week prior to the date set for the boxing match, and $350 on the evening of the contest, except that in the months of July and August, he agreed to pay $100. He agreed to pay the state tax of 5 per cent. and the federal tax of 10 per cent. The club agreed to furnish a large hall known as Manhattan Casino, lighted and heated, and with seats, boxes, and ring all arranged for a boxing contest. Plaintiff in error agreed to pay the ticket takers and ticket sellers and other necessary officials, such as the referee, physician timekeepers, ushers, and announcers. It was agreed that 'boxing shows' should be mutually agreeable to the parties and further that--

'This contract shall remain in force during the life of the present license held by the Manhattan Boxing Club, Inc., but may be terminated by either party by the giving of 90 days' written notice.'

Under the state law the boxing commission had authority to grant a license to a corporation only. The plaintiff in error neither applied for nor was he granted a boxing license. The boxing exhibitions were conducted under the sanction and authority of New York boxing commission and the license was issued to the club.

The plaintiff in error has been tried and convicted on an indictment charging, in eight counts, a violation of sections 800, 802, and 1308b of the Internal Revenue Law known as the Revenue Act of 1918 (40 Stat. 1057, 1120, 1143) and in four counts of embezzlement of government moneys in violation of section 47 of the United States Criminal Code. The first, fourth, seventh, and tenth counts charge the plaintiff in error with having willfully failed and refused to account for and pay over sums of money due as an excise tax to the United States on the amount of money received as admissions paid to said exhibitions.

This charge is based on section 1308 (section 6371 1/2h) which provides that--

'Any person who willfully refuses to pay, collect, or truly account for and pay over any such tax, make such return or supply such information at the time or times required by law or regulation, or who willfully attempts in any manner to evade such tax shall be guilty of a misdemeanor and in addition to other penalties provided by law shall be fined not more than $10,000 or imprisoned for not more than one year, or both, together with the costs of prosecution.'

In counts second, fifth, eighth, and eleventh, he is charged with a violation of the same section, subdivision (a) of which provides:

'That any person required under titles V, VI, VII, VIII, IX, X, or XII, to pay or to collect, account for and pay over any tax, or required by law or regulation made under authority thereof to make a return or supply any information for the purposes of the computation, assessment or collection of any such tax, who fails to pay, collect, or truly account for and pay over any such tax, make any such return or supply any such information at the time or times required by law or regulation shall in addition to other penalties provided by law be subject to a penalty of not more than $1,000.00.'

Counts third, sixth, ninth, and twelfth charge an embezzlement in having unlawfully, knowingly, and willfully embezzled moneys of the United States representing the tax on admissions paid to the exhibitions. Section 47 of the United States Criminal Code makes it a crime for any one to 'embezzle, steal, or purloin any money, property, record, voucher, or valuable thing whatever, of the moneys, goods, chattels, records, or property of the United States. ' The plaintiff in error has no connection as an officer or director of the corporation and from all that appears in the record, he had but a contractual relation. The boxing club was organized by an attorney, who secured a license, and thereupon it entered into a contract with the plaintiff in error for conducting boxing exhibitions under its license and for producing the revenue referred to in the contract. Boxing exhibitions were held and admission fees were collected. There is no proof as to the amount of tax collected, save such as might...