United States v. One 1953 Oldsmobile Sedan

Decision Date13 June 1955
Docket NumberCiv. A. No. 623.
Citation132 F. Supp. 14
PartiesUNITED STATES of America, Libelant, v. ONE 1953 OLDSMOBILE SEDAN, Motor No. R376229, Serial No. 539A5536.
CourtU.S. District Court — Western District of Arkansas

Charles W. Atkinson, U. S. Atty., Henry M. Britt, Asst. U. S. Atty., Fort Smith, Ark., for libelant.

Richard W. Hobbs, Hot Springs, Ark., for defendant.

JOHN E. MILLER, District Judge.

The libel of information was filed on March 28, 1955, against the above-described automobile and alleged that the automobile was seized on land by investigators, Julian S. Majors and Robert Finley, of the Internal Revenue Service of the United States and that the same was being held by the Internal Revenue Service of the United States at a certain storage place in the City of Hot Springs, Arkansas, the appraised value of the motor vehicle being $1,350.

It was further alleged:

"That for cause of said seizure, said motor vehicle on or about March 15, 1955, was used by James T. Barker in violating the provisions of the Internal Revenue laws of the United States in that said motor vehicle was employed by James T. Barker to aid him in engaging in the business of wagering without having paid the Special Tax imposed under Section 4411 of the 1954 Internal Revenue Code 26 U.S.C.A. contrary to Section 7302 of the 1954 Internal Revenue Code of the United States."

On April 7, 1955, the alleged owner of the automobile filed his answer in which he admitted that his automobile had been seized by "agents of the Internal Revenue Service of the United States." However, the owner denied that the investigators named in the libel of information were the officers who seized the automobile. All other allegations in the libel of information were denied.

On the same date that the libel of information was filed, the United States Attorney filed an information against the said James T. Barker in Criminal Action No. 555, in which information the said defendant, James T. Barker, was charged in Count I with engaging, on March 15, 1955, in the business of wagering without having paid a Special Tax as required by law, in violation of Section 4411 of the 1954 Internal Revenue Code.

In Count II the defendant was charged with the offense of engaging in the business of wagering, on March 15, 1955, without having registered with the District Director of the Internal Revenue at Little Rock, Arkansas, as required by law, in violation of Section 4412 of the 1954 Internal Revenue Code.

To this information the defendant entered a plea of not guilty to both counts and, on the 26th day of April, 1955, the charges contained in the information were tried to a jury. The government introduced five witnesses in support of the allegations contained in the information and the defendant introduced only himself and wife, Mrs. James T. Barker. The jury returned a verdict of not guilty, and the defendant was discharged.

At the conclusion of the trial of the criminal action, the instant case was called for trial. Whereupon, the United States Attorney, representing the libelant, and Mr. Richard W. Hobbs, representing the claimant of the automobile, agreed that the case should be submitted to the court "upon the evidence presented in Criminal Action No. 555." At the time, the United States Attorney suggested that certain evidence taken from the person of the said James T. Barker at the time of his arrest, but which evidence was suppressed at the trial of the criminal case, should be considered by the court. Apparently the suggestion was acceptable to the attorney for the claimant and the court included in the order of submission that such evidence would be considered, along with a statement, to be filed, of the witness who obtained the documentary evidence from the claimant at the time of his arrest.

It was suggested by the court that counsel should file briefs with the court on the question of jurisdiction "or any other question which they might desire to discuss."

The briefs have been filed and considered by the court, along with the testimony that was heard at the trial of the criminal case as aforesaid, and the court, having considered said testimony, together with the arguments and contentions of the attorneys for the respective parties, now makes and files herein its Findings of Fact and Conclusions of Law, separately stated:

Findings of Fact

1.

On March 15, 1955, the claimant of the automobile, James T. Barker, had not paid the tax levied upon persons engaged in receiving wagers for or in behalf of any person. Neither had he registered with the official in charge of the Internal Revenue District in which Hot Springs, Arkansas, is located.

2.

William Aronson is the brother-in-law of the claimant, James T. Barker, and lives at 230 Park Terrace in Hot Springs, Arkansas, His telephone number is 7169J. The claimant, Mr. Barker, lives at 210 Park Terrace and his telephone number is 1352. Aronson was engaged in the business of receiving wagers for and on behalf of persons who desired to place wagers with him, and he had paid the Special Tax and registered with the Director of Internal Revenue for the District of Arkansas at Little Rock.

The telephone in the home of the claimant, Mr. Barker, is private. Apparently, every day Mr. Aronson would go to the home of the claimant Barker, and it was generally known by prospective bettors that, if they desired to place a bet with Aronson, they should call telephone number 1352 which, as above stated, was in the home of Mr. Barker, the claimant. In fact, all of the witnesses who testified to having placed wagers with Aronson testified that they would reach him by calling that telephone number. Mr. Aronson stated that he used the claimant's telephone for convenience and that he spent the latter part of the morning and early afternoon of each day at the home of the claimant for the purpose of receiving wagers.

Most wagers were placed upon horse races and, after the race was run and the results known, Mr. Aronson would compile a list of the day's business showing the name of each person who had placed a wager, the amount of the wager and the result of the race. Aronson did not own a private automobile, but the claimant Barker owned the automobile now in question. Barker was not physically able to drive the automobile with safety. It was necessary for Aronson to keep in contact with the persons who made the wagers and, on the morning following the day the wager was made, he would call upon each one of his customers. If the bettor had won the wager, Aronson would pay according to the terms of the wager and, if the bettor lost, the bettor would in turn pay Aronson the amount of the bet. The automobile in question was used in making calls upon the bettors and Aronson was usually accompanied by the claimant, Mr. Barker. Mrs. Barker customarily drove the automobile because of the physical condition of the claimant Barker.

3.

The claimant, James T. Barker, and Charles F. Mahoney, as partners, first registered in May, 1952, and paid the annual Special Tax (levied upon persons who were engaged in receiving wagers for or on behalf of other persons) from that date to January 18, 1955. Prior to January 18, 1955, the claimant Barker withdrew from the partnership, which at that time was operating as a club, and on January 18, 1955, Mahoney applied for a change in the registration from the partnership to himself individually. Thus Barker was not registered on March 15, 1955, and had paid no tax for that period.

Aronson was an employee of the partnership and duly registered from July 1, 1953, to March 1, 1955, as an agent. The last registration of Aronson as an agent covered the period from July 1, 1954, to June 30, 1955. At that time the partnership was doing business at 841½ Central Avenue, Hot Springs, Arkansas, and the registration of Aronson showed that he was registering as an agent of said partnership of Barker and Mahoney.

Subsequent to the withdrawal of Barker from the partnership of Barker and Mahoney, which, as above stated, was operating under a club name, Aronson applied for registration as a principal for the period from March, 1955, to June 30, 1955. The actual application of Aronson for registration as an individual and in his own right is for the period "from March, 1955, to June 30, 1955." The application listed the business address of Aronson as 210 Park Terrace, Hot Springs, and his residence as 230 Park Terrace, Hot Springs. His application showed that he had no employees and was dated March 21, 1955, but apparently the Internal Revenue Service treated the application of Aronson as beginning March 1, 1955.

The claimant Barker was fully advised of his own status. That is, he knew he was not registered as an agent or principal from the date of the dissolution of his partnership on January 18, 1955, and Barker also knew that his brother-in-law Aronson had changed his registration from agent to principal, effective March 1, 1955, to June 30, 1955. It should be remembered that the authority under which Aronson operated up to March, 1955, was under the registration as an agent for the period from July 1, 1954, to June 30, 1955, and when his application for such change was made, the stamp No. 14664 which had been issued to Aronson as an agent was changed and corrected to show Aronson's operation as a principal subsequent to March, 1955.

There can be no doubt that the claimant Barker assisted Aronson in the business that he conducted at Barker's residence, but the government made no contention that Aronson was not duly registered on March 15, 1955.

4.

There was no direct ore tenus testimony which in itself established that the claimant Barker personally engaged in receiving wagers. However, it is undisputed that the business was conducted from the residence of Barker, over his private telephone, and with the use of his automobile, although it was conducted in the name of Aronson, his brother-in-law....

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