Reinecke v. O. D. Jennings & Co.

Seventh Circuit

Reinecke v. O. D. Jennings & Co.

16 F.2d 927, 6 A.F.T.R. (P-H) 6475, 1927 U.S. App. LEXIS 3661, 1927 U.S. Tax Cas. (CCH) 7088, 6 A.F.T.R. (RIA) 6475

CourtCourt of Appeals for the Seventh Circuit

DecidedJanuary 25, 1927

DocketNo. 3792

StatusPublished

This text of 16 F.2d 927 (Reinecke v. O. D. Jennings & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Reinecke v. O. D. Jennings & Co., 16 F.2d 927, 6 A.F.T.R. (P-H) 6475, 1927 U.S. App. LEXIS 3661, 1927 U.S. Tax Cas. (CCH) 7088, 6 A.F.T.R. (RIA) 6475 (7th Cir. 1927).

Pincite

Opinion

PAGE, Circuit Judge.

This is an appeal from an order restraining appellant, collect- or of internal revenue at Chicago, from collecting from appellee a sum of money that the appellee avers was wrongfully demanded as a' tax under paragraph 5, section 900, of the Revenue Act of 1918 (Comp. St. § 6309%a), on certain of appellee’s manufactures, alleged to be “slot machines of the exclusively gambling type,” known as “operator’s bells” and “traders.”

One of appellee’s contentions is that “the exaction demanded was not a tax,” but it admits that, if it was a tax, the court was, by reason of section 3224 of the Revised Statutes (Comp. St. § 5947), without jurisdiction.

Its main reliance, it says, is upon Lipke v. Lederer, 259 U. S. 557, 42 S. Ct. 549, 66 L. Ed. 1061, which was followed by this court in Jakovich v. Mager, 283 F. 980. The question in the Lipke Case arose under section 35 of the National Prohibition Act (Comp. St. § 10138%v). Section 35 and paragraph 5, section 900, supra, are so different in language and purpose that we are of opinion that in the light of the Lipke Case it clearly appears that any exaction under the latter section must be for a tax, and not for a penalty. In fact, appellee makes no argument to show that any exactions leviable under paragraph 5, section 900, are not taxes but seems to concede that fact. It contends that slot machines alleged to be “of the exclusively gambling type” do not come within the language of that paragraph and section, or within any other section of the Revenue Act of 1918, and the whole argument seems to be intended to support appellee’s urge that if an exaction is not authorized by some statute, even though the taxing authorities believe it to be so, its collection may be enjoined in equity. We held to the contrary in Peacock v. Reinecke, 3 F.(2d) 583, 584.

The decree should be and is reversed, with directions to the District Court to vacate the injunction and, dismiss the bill.

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PAGE, Circuit Judge.

This is an appeal from an order restraining appellant, collect- or of internal revenue at Chicago, from collecting from appellee a sum of money that the appellee avers was wrongfully demanded as a' tax under paragraph 5, section 900, of the Revenue Act of 1918 (Comp. St. § 6309%a), on certain of appellee’s manufactures, alleged to be “slot machines of the exclusively gambling type,” known as “operator’s bells” and “traders.”

One of appellee’s contentions is that “the exaction demanded was not a tax,” but it admits that, if it was a tax, the court was, by reason of section 3224 of the Revised Statutes (Comp. St. § 5947), without jurisdiction.

Its main reliance, it says, is upon Lipke v. Lederer, 259 U. S. 557, 42 S. Ct. 549, 66 L. Ed. 1061, which was followed by this court in Jakovich v. Mager, 283 F. 980. The question in the Lipke Case arose under section 35 of the National Prohibition Act (Comp. St. § 10138%v). Section 35 and paragraph 5, section 900, supra, are so different in language and purpose that we are of opinion that in the light of the Lipke Case it clearly appears that any exaction under the latter section must be for a tax, and not for a penalty. In fact, appellee makes no argument to show that any exactions leviable under paragraph 5, section 900, are not taxes but seems to concede that fact. It contends that slot machines alleged to be “of the exclusively gambling type” do not come within the language of that paragraph and section, or within any other section of the Revenue Act of 1918, and the whole argument seems to be intended to support appellee’s urge that if an exaction is not authorized by some statute, even though the taxing authorities believe it to be so, its collection may be enjoined in equity. We held to the contrary in Peacock v. Reinecke, 3 F.(2d) 583, 584.

The decree should be and is reversed, with directions to the District Court to vacate the injunction and, dismiss the bill.

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Bluebook (online)

16 F.2d 927, 6 A.F.T.R. (P-H) 6475, 1927 U.S. App. LEXIS 3661, 1927 U.S. Tax Cas. (CCH) 7088, 6 A.F.T.R. (RIA) 6475, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reinecke-v-o-d-jennings-co-ca7-1927.

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