Opinion of the Court 149 C. Cls. the tickets had formerly been sold. The plaintiff determined how many tickets should be printed. Things went along this way for about three months, i.e. until about September 30, 1952, when the Lodge decided that it was probably not exempt from the wagering tax, and that the operation was not profitable enough to compensate for the risks and the stigma which attached to the business. Thereupon the plaintiff consented to the termination of his contracts with the Moose, took his building and equipment and employees back, and resumed the operation of the lottery business. The Moose had, during the three months of their operation, repaid the $9,000 loan, paid the $400 a month rent, paid for the tickets bought from the plaintiff, and paid the employees' salaries, and the taxes on their salaries. It had made a profit of some $2,000 on the operation. The Government says that on June 30 and during the three months thereafter the plaintiff was engaged in wagering. We think not. We think that only by permitting the law of inertia to carry what the plaintiff was doing before June 30 over to what he was doing after October 1 can he be said to have been engaged in wagering between those two dates. The plaintiff had a long established and profitable business of printing these copyrighted and fancy-named baseball pool tickets. The profit had been taken out of the distribution of the tickets by the 10 percent excise tax. If someone exempt from the tax would take over the distribution operation, but would buy the tickets from his printing enterprise, that would keep the printing enterprise going. If one wants to sell a going business to a buyer who has no money, but who gives promise of making money out of the business, and if it takes immediate cash to keep the business going until its proceeds begin to come in, it is necessary to achieve the sale, and it may be prudent, to advance that cash. The test, of course, of whether one is engaged in wagering, is whether he is risking his money in a game of chance in which he may win, or lose, depending on the eventuality. The plaintiff was not in that situation during the period in question. If the lottery was profitable to the operator, the Moose got the profit. If luck favored the ticket buyers, the Moose took the loss. The fact that one lends money, or leases 33 Dissenting Opinion by Justice Reed a building, to a gambler may impair his chances of being paid the loan or the rent, but it does not require him to buy a gambler's license or pay an excise tax which is imposed on gamblers. The Government has filed a counterclaim for $40,704.03, plus interest, based upon assessments made by it against the Moose Lodge and the plaintiff for wagering taxes for the months of June, July, August and September, 1952. The Government's brief mentions the counterclaim but does not discuss it. The assessment for June seems to have been applicable only to June 30, the one day for which the plaintiff paid the $500 involved in this suit. The plaintiff's activities in July, August and September were the same as those of June 30. It follows, then, that the plaintiff was not engaged in wagering at any time covered by the assessments recited in the counterclaim, and is not indebted to the Government for taxes for that period. The plaintiff is entitled to a judgment for $500, with interest as provided by law. The defendant's counterclaim is dismissed. It is so ordered. LITTLETON, Judge (Ret.), and LARAMORE, Judge, concur. REED, Justice (Ret.), sitting by designation, dissenting, with whom JONES, Chief Judge, joins: The facts found by the court lead us to a conclusion contrary to its judgment. Taxation should not be subject to evasion by arrangements, no matter how clever. Since Lucas v. Earl, 281 U.S. 111, where a husband by a contract, valid inter partes, agreed that all earnings and gifts received by him should be considered as received by him and his wife as joint tenants, the rule has been that "attenuated subtleties" do not evade a tax. This "technically elegant arrangement" through "lawyers' ingenuity" does not seem to change the fact that Rahke actually participated in the profits from the gaming operation.1 Such transactions must be "viewed as a whole." 2 1 See Griffiths v. Commissioner, 308 U.S. 355, 357. * Commissioner v. Court Holding Co., 324 U.S. 331, 334. Dissenting Opinion by Justice Reed 149 C. Cls. Plaintiff, prior to the arrangement with the Moose, operated a printing business that produced tickets, protected by trademarks, used in wagering baseball pool transactions. These tickets were distributed by Rahke's organization through agents and dealers, and he received all the profits. Because of the wagering tax provisions of the Revenue Act of 1951, imposing a ten percent tax on the wagers, his operation lost money, and plaintiff reorganized the business by arranging for it to be operated by a fraternal organization as described in the court's opinion and findings of fact. It was hoped that the activities, when carried on in the name of the Order of the Moose, would be exempt from the wagering tax. 4 To get this hoped-for exemption, the plaintiff transferred his trademarks, his operating space, equipment, and trained personnel to the Moose. He advanced the money for starting the pool, $9,000. We assume that all this was done for fair compensation. He agreed to produce the necessary tickets only for the Moose. Furthermore, plaintiff helped, apparently without pay, with the estimates and orders for the tickets to carry on the enterprise. Plaintiff agrees that his printing gross for the three months of this operation was $326,297.10. In one sense, it is true that if the lottery was profitable to the operator, "the Moose got the profit." But only after the plaintiff had skimmed off the cream of the profits by his sale of the baseball tickets to the Moose. Before this agreement Rahke operated the entire gambling process including the printing of the tickets, their sale, and the distribution of prizes to winners. The arrangements with the Moose effected a division of this operation into two parts. We cannot acquiesce in the majority's view that this artificial division of what is in fact an integrated process into two 365 Stat. 529. 426 U.S.C. (I.R.C., 1939) § 3285 (b) (2) (B) exempted from tax: "any drawing conducted by an organization exempt from tax under section 101, if no part of the net proceeds derived from such drawing inures to the benefit of any private shareholder or individual." Id., § 101 exempted from tax: "(3) Fraternal beneficiary societies, orders, or associations (A) operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system;" 33 Findings of Fact parts worked any legally significant change in Rahke's status as a "person who is engaged in the business of accepting wagers" or as a "person who conducts a wagering pool or lottery." 5 The Moose lodge involved here was not a "dummy" in the normal use of the term in that it did enjoy some independent existence apart from its function as Rahke's agent in this scheme. The artificiality here was in the attempt to give the appearance that these were two unrelated enterprises engaged in connected but different businesses, when in fact this was one operation run by one group of persons. If we do not completely ignore the role played by the Moose lodge in this operation as a mere subterfuge, at very least we must recognize that Rahke and the lodge were joint venturers in this business. As such they come under the conclusion enunciated in Woodard v. Campbell, 235 F. 2d 268 (1956), and are each liable for the tax. We would therefore enter judgment for the defendant. Whitaker, Judge, took no part in the consideration and decision of this case. FINDINGS OF FACT The court, having considered the evidence, the report of Trial Commissioner William E. Day, and the briefs and argument of counsel, makes findings of fact as follows: 1. The plaintiff, a citizen of the United States, and a resident of Indianapolis, Indiana, brings this action to recover an amount paid under protest which had been assessed against him and others for Federal wagering excise taxes. The defendant has filed a counterclaim in which it seeks an additional amount which has been assessed and remains unpaid. 2. During all periods of time involved herein, the plaintiff was the owner of all the outstanding shares of stock of Rahke Printing Co., Inc., and Silent Salesman Co., Inc., 26 U.S.C. (I.R.C., 1939) § 3285(d): "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. Each person who conducts any wagering pool or lottery shall be liable for and shall pay the tax under this subchapter on all wagers placed in such pool or lottery." Findings of Fact 149 C. Cls. each of which entities is a corporation organized and existing under and by virtue of the laws of the State of Indiana, and is engaged in the printing business with its principal place of business at 433 North Park Avenue, also known as 601 East Michigan Street, Indianapolis, Indiana. 3. During all times involved herein, the plaintiff was the lessee of a printing business known as Masten Printing Co., which printing business was a sole proprietorship owned by Hazel Masten Jenkins and located at 433 North Park Avenue, Indianapolis, Indiana. 4. During all periods of time involved herein, Rahke Printing Co., Inc., was the sole owner of certain trademarks consisting of pictorial representations of various phases of the moon and a bolt of lightning, which trademarks were commonly known as "Rahke Moon" and "Rahke Lightning", respectively, and were registered with the Secretary of State of Indiana under the provisions of Acts 1891, c. 116, Section 1, p. 317, as amended (Burns' Ind. Stat. Ann., Section 66-107 (1951 Repl.)). 5. During all times mentioned herein, Silent Salesman Co., Inc., was the sole owner of certain trademarks consisting of the words "moon" and "lightning," which trademarks were registered with the Secretary of State of Indiana under the provisions of Acts 1891, c. 116, Section 1, p. 317, as amended (Burns' Ind. Stat. Ann., Section 66-107 (1951 Repl.)), and on which words the Commissioner of Patents had issued trademark registrations No. 326,772 and No. 326,959, respectively. 6. During all periods of time mentioned herein, Masten Printing Co. was the sole owner of certain trademarks consisting of pictorial representations of various phases of the moon and a bolt of lightning, which trademarks were commonly known as "Masten Moon" and "Masten Lightning." 7. At all times involved herein, the plaintiff was the owner of a two-story building located at 433 North Park Avenue, Indianapolis, Indiana. 8. The plaintiff's father died while the plaintiff was in military service. His father had been in several business enterprises, the most lucrative of which was the printing and manufacturing of baseball pool tickets through Silent |