Tyler v. United States

• Decision Date: 10 July 1968
• Docket Number: No. 23784.,23784.
• Citation: 397 F.2d 565
• Parties: John Owen TYLER, Appellant, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

397 F.2d 565 (1968)

John Owen TYLER, Appellant, v. UNITED STATES of America, Appellee.

No. 23784.

United States Court of Appeals Fifth Circuit.

July 10, 1968.

Wesley R. Asinof, Atlanta, Ga., for appellant.

Allen L. Chancey, Jr., Asst. U. S. Atty., Atlanta, Ga., Owen A. Neff, Atty., Dept. of Justice, Washington, D. C., for appellee.

Before COLEMAN and AINSWORTH, Circuit Judges, and CARSWELL, District Judge.

CARSWELL, District Judge:

Appellant was convicted by a jury on 3 counts of a 25 count indictment for wilful failure to file excise tax returns and to pay excise taxes imposed upon gambling operations.

This appeal attacks the rulings of the trial court (1) in denying dismissal of the indictment; (2) in refusing a requested charge; (3) in allowing the jury to separate overnight during deliberations; (4) in accepting the jury's verdict on 3 counts of the indictment the following morning; and (5) in declaring a mistrial on the remaining counts.

We affirm on the first four issues presented, all of which have to do with Counts Five, Seven, and Eight upon which appellant was convicted. The record shows that the fifth point directed solely to other counts has not been presented to the district court for its necessary initial consideration. It is, moreover, immaterial to the judgment of conviction appealed from and here affirmed.

I. Sufficiency of the Indictment

The entire thrust of appellant's contention here is that the indictment, in its several counts, charges him with the acceptance of wagers but does not allege that acceptance was on his account or that such wagers were "placed with him." He urges that the acceptance of wagers does not attach liability for the payment of the excise tax and therefore no federal crime is charged and the indictment should have been dismissed.

We do not agree.

The most relevant portions of the excise tax statutes are:

(1) 26 U.S.C. § 4401

"(a) Wagers. — There shall be imposed on wagers, as defined in section 4421, an excise tax equal to 10 percent of the amount thereof.

* * * * * *

"(c) Persons Liable for Tax. — Each person who is engaged in the business of accepting wagers shall be liable for and shall pay the tax under this subchapter on all wagers placed with him. * * *"

(2) 26 U.S.C. § 4421

"For purposes of this chapter —

(1) Wager. — The term `wager\' means —

(A) Any wager with respect to a sports event or a contest placed with a person engaged in the business of accepting such wagers, * * *"

Also 26 CFR, Section 44.4401-2, provides, in part, as follows:

"Person liable for tax — (a) In general. (1) Every person engaged in the business of accepting wagers with respect to a sports event or a contest is liable for the tax on any such wager accepted by him. * * * To be liable for the tax, it is not necessary that the person engaged in the business of accepting wagers * * * physically receive the wager. * * * Any wager * * * received by an agent or employee on behalf of such person shall be considered to have been accepted by and placed with such person."

We can find no logic at all in appellant's contention that the specific words placed with him must be enunciated in an indictment to state a valid charge under Section 4401(c), supra, where the words "engaged in the business of accepting wagers * * *" is specifically set forth.

In the context of this statute the words "accepting wagers" are synonymous with the phrase "wagers placed with him" and "on his account." This interpretation is reflected in a portion of 26 CFR 44.4401-2 which states: "Any wager * * * received by an agent or employee on behalf of such person shall be considered to have been accepted by and placed with such person." (Emphasis added.)¹

The legal efficacy of regulations such as this has been recognized by the Supreme Court. In Maryland Casualty Co. v. United States, 251 U.S. 342, 349, 40 S.Ct. 155, 157, 64 L.Ed. 297 (1920):

"* * * It is settled by many recent decisions of this court that a regulation by a department of government, addressed to and reasonably adapted to the enforcement of an act of Congress, the administration of which is confided to such department, has the force and effect of law if it be not in conflict with express statutory provision. United States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563; United States v. Birdsall, 233 U.S. 223, 231, 34 S.Ct. 512, 58 L.Ed. 930; United States v. Smull, 236 U.S. 405, 409, 411, 35 S.Ct. 349, 59 L.Ed. 641; United States v. Morehead, 243 U.S. 607, 37 S.Ct. 458, 61 L.Ed. 926."

Moreover, this is consonant with the legislative history of these excise tax statutes. In both the Senate and House Reports the following statement appears:

"A person is considered to be in the business of accepting wagers if he is engaged as a principal who, in accepting wagers, does so on his own account. The principals in such transactions are commonly referred to as `bookmakers\' although it is not intended that any technical definition of `bookmaker\', such as the maintenance of a handbook or other device for the recording of wagers, be required * * *. Persons who receive bets for principals are sometimes known as `bookmakers\' agents\' or as `runners.\'" Emphasis supplied. H.R.Rep.No.586, 82d Cong. 1st Sess. 56 (1951); Sen.Rep.No.781, 82d Cong. 1st Sess. 114 (1951), U.S. Code Cong. and Adm.Service 1951, pp. 1839, 2091.

We conclude that the district court properly denied the motion to dismiss the indictment and agree with its statement that:

"* * * under the language and plain meaning of the applicable statutes and regulations, wagers are not considered as having been `placed\' with an individual until such time as they have been `accepted\' by him. The contractual nature of the wager requires an acceptance, and it is not until an acceptance has been manifested that a wager may be considered as having been `placed\'. Thus, the indictment charging that wagers were `accepted\' by the defendant sufficiently states an offense under 26 U.S.C., § 7201, and 26 U.S.C., § 7203, regarding the liability of the defendant for taxes on wagers `placed\' with him. Hagner v. United States, 285 U.S. 427 52 S.Ct. 417, 76 L.Ed. 861; Spies v. United States, 317 U.S. 492 63 S.Ct. 364, 87 L.Ed. 418; United States v. McCormick 2 Cir., 67 F.2d 867, cert. den. 291 U.S. 662 54 S.Ct. 438, 78 L.Ed. 1054; United States v. Pepe D.C., 198 F.Supp. 226; United States v. Manos 3 Cir., 340 F.2d 534."

II. Requested Instruction

The prosecution under Counts Five, Seven, and Eight was under 26 U.S.C. § 7203 as noted before. The trial court refused appellant's requested instruction to the jury that another section of the gambling excise statute, i. e., 26 U.S.C. § 7262, is a lesser included offense and that the jury would be authorized therefore to return, alternatively, one of three forms of verdict, i. e., not guilty, or guilty of violation of Section 7203, or guilty of violation of Section 7262, depending upon the jury's findings on the evidence presented.

The two sections are entirely separate and distinct entities. Section 7262 reads:

"Any person who does any act which makes him liable for special tax under subchapter B of chapter 35 without having paid such tax, shall, besides being liable to the payment of the tax, be fined not less than $1,000 and not more than $5,000." (Emphasis added.)

Subchapter B of Chapter 35 is entitled "Occupational Tax," 26 U.S.C. § 4411. Section 7203, on which the prosecution was based, makes it an offense to wilfully fail to file wagering excise tax returns as required by 26 U.S.C. § 4401 which is contained in Subchapter A of Chapter 35 and therefore has no relation whatsoever to Section 7262.

The complete answer to appellant's contention here is that he was not charged in these counts with wilful failure, in violation of Section 7203, to pay the special occupational tax. If he had been so charged then Section 7262 would indeed have been a lesser included offense.

The trial court quite properly denied what would have been an erroneous instruction.

III. Separation of Jurors

Next it is urged that it was reversible error for the district court to allow the jurors to separate overnight after they had begun their deliberations. No objection was made at the time but appellant says that he could not have done so in the presence of the jurors without incurring their prejudice. A general objection was made the following morning without suggestion that there had been actual prejudice in any specific way.

A review of the record here shows no suggestion of prejudice whatsover by this procedure, nor is there any reason advanced why an objection could not have been made in the absence of the jury. Assuming, arguendo, that a timely objection had been made there still is nothing to suggest that the trial court would have abused its discretion by overruling it. Appellant concedes that the trial court has broad discretion to allow the jurors to separate during the course of the trial and prior to the submission of the case to them for deliberation, but urges that jurors in criminal cases may not be dispersed, as a matter of the court's discretion or otherwise without the accused's consent, at any time after submission of the case to them until finally discharged. This is advanced as a proposition stemming from the Fifth Amendment and one which sweeps away all necessity for any factual showing or suggestion of actual or implied prejudice to the defendant on trial. Appellant states the court may not prejudice his right to a verdict "by placing the jurors in a position of comfort whereby their deliberations may be looked on in a different light the next day."

To fashion an inflexible rule as urged here would in our judgment be at least as likely to create potentially prejudicial situations as to cure them. There are indeed countless circumstances when jurors should be sequestered. To catalogue these many splendored variables would be endless — and totally...