Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; Michael L. Igoe, Judge.
Before EVANS, SPARKS, and MINTON, Circuit Judges.
Appellant is a manufacturer of punchboards and push cards. Such as he manufactures are used for gambling purposes only. A sum of money is paid for the privilege of punching a number out on the punchboard.
If the party is lucky and gets the right number, he gets back in merchandise or money more than he paid for the privilege of punching. The push card has one lucky number that is awarded the prize in money or merchandise after all the numbers are pushed off the card, at which time the lucky number concealed at the top of the push card is exposed to determine which was the lucky number. Appellant between April 1, 1935 and June 30, 1938 sold these punchboards and push cards to purchasers all over the United States, who were classified on his books as retailers, operators, jubbers and manufacturers. On these sales, an excise tax of ten per cent was added to the purchase price and passed on to the purchaser.The tax thus collected was paid by the appellant to the appellee, who was Collector of Internal Revenue for the First District of Illinois. Appellant sought the return of the tax thus paid on the ground that his merchandise did not come within the statute. The claim as originally filed with and denied by the appellee covered sales to all four classifications of retailers, operators, jobbers and manufacturers, and amounted to $175,221.53. In the suit in the District Court to recover on this claim which had been denied by the appellee, the appellant reduced his claim to cover only retailers and operators, in the sum of $24, 266.68. The District Court denied the claim and entered judgment for the appellee.
we are presented with two questions on this appeal. First, were the boards and push cards "games and parts of games" within the meaning of Section 609 of the Revenue Act of 1932, Chap. 209, 47 Stat. 264, 26 U.S.C.A. Int. Rev. Acts, page 612; and second, did the appellant as a condition precedent to his right to recover the tax alleged to be erroneously collected discharge his burden under Section 621 (d) of the Revenue Act of 1932, 47 Stat. 268, cf. 26 U.S.C.A. Int. Rev. Code, § 3443(d), of showing that he had filed with the Commissioner written consent of the ultimate purchaser to the allowance of the credit or refund?
The pertinent provisions of the statute read as follows:
" § 609. Tax on Sporting Goods.
"There is hereby imposed upon the following articles, sold by the manufacturer, producer, or importer, a tax equivalent to 10 per centum of the price for which so sold: Tennis rackets, tennis racket frames and strings, nets, racket covers and presses, skates, snowshoes, skis, toboggans, canoe paddles, polo mallets, baseball bats, gloves, masks, protectors, shoes and uniforms, football helmets, harness and uniforms, basketball goals and uniforms, golf bags and clubs, lacrosse sticks, balls of all kinds, including baseballs, footballs, tennis, golf, lacrosse, billiard and pool balls, fishing rods and reels, billiard and pool tables, chess and checker boards and pieces, dice, games and parts of games (except playing cards and children's toys and games); and all similar articles commomly or commercially known as sporting goods."
" § 621 * * * (d) No overpayment of tax under this title shall be credited or refunded * * * in pursuance of a court decision or otherwise, unless the person who paid the tax establishes * * * (2) that he has repaid the amount of the tax to the ultimate purchaser of the article, or unless he files with the Commissioner written consent of such ultimate purchaser to the allowance of the credit or refund."
The appellant relies upon the consent provision in the last clause.
The District Court filed its findings of fact and stated its conclusions of law thereon. Findings 21, 22 and 23, which present the substantial questions on this appeal, read as follows:
"21. The plaintiff has failed to establish by a fair preponderance of the evidence that the articles with respect to which the taxes were imposed were not games or parts of games within the meaning of Section 609 of the Revenue Act of 1932.
"22. The plaintiff has failed to establish by a fair preponderance of the evidence that it has secured from the ultimate purchasers of the articles with respect to which the taxes were imposed, of filed with the Commissioner the written consents of such ...