Respondent, Aronson, trustee in bankruptcy of the Viking Manufacturing Company, Inc., brought suit in the United States District Court for Massachusetts to recover $37,021.63 exacted of the bankrupt by the collector, under color of section 609, Revenue Act 1932, (chapter 209, 47 Stat. 264 (26 U.S.C.A. note at end of chapter 20)), on account of jigsaw picture puzzles manufactured and sold from June 21, 1932, to May 1, 1933.
The puzzles were made by cutting selected pictures backed up by rigid cardboard into from 162 to 500 separate pieces. These were sold to those who found diversion or amusement in putting them together so as to reproduce the original picture.
Obviously the word 'games' in the statute was intended to designate instrumentalities used in playing them.
The collector maintained that the effort properly to arrange the pieces was for amusement or diversion and amounted to a game, within the appropriate definition of the word. Accordingly, he said, these instrumentalities were taxable.
On the other hand, respondent insisted that the word 'games' refers to contests, physical or mental, conducted according to set rules, undertaken for amusement or recreation or for winning a stake, requiring the participation of two or more persons;2 also that the sundry pieces were parts of a puzzle, a contrivance designed for testing ingenuity-something not within the scope of the statute.
The trial judge, having heard the cause upon pleadings and evidence without a jury, sustained the collector's defense. The Circuit Court of Appeals concluded otherwise and directed judgment for the trustee. It said:
'The section (609) is headed 'Tax on Sporting Goods.' The articles or instrumentalities there specifically named are sporting goods whether they are used in connection with games or in some recreation or diversion other than a game. But the larger portion of the article specifically named are all used in games of contest between two or more persons, and the question of construction is whether the articles or instrumentalities intended to be covered by the phrase 'games and parts of games' means articles or instrumentalities used in games or contest like the specific articles previously named in the section, which are used in games of tennis, polo, baseball, etc., all of which involve a contest. * *
*'Furthermore, the particular article here sought to be taxed is a puzzle. A puzzle is defined as 'something which perplexes or embarrasses; a difficult problem or question; hence a toy, contrivance, question or problem designed for testing ingenuity; as a cross word puzzle.' Webster's New International Dictionary. A jigsaw picture puzzle comes squarely within this definition-'a contrivance * * * designed for testing ingenuity.' None of the articles specifically named in the statute and used in games is a contrivance designed for testing ingenuity. They are designed for use in games of contest, while a jigsaw puzzle is not.'
Section 600(f), (c. 63, 40 Stat. 316) Revenue Act 1917, and section 900(5), (c. 18, 40 Stat. 1122) Revenue Act 1918 (repealed in 1921 (42 Stat. 321)), laid a tax upon tennis rackets, golf clubs, baseball bats, etc., 'chess and checker boards and pieces, dice, games and parts of games.' Jigsaw picture puzzles were then well-known articles of commerce. They go back at least to the first part of the last century-perhaps much farther. The same words 'games or parts of games' appear again in the like section 609-Revenue Act 1932.
The court below pointed out that: 'A jigsaw puzzle was never taxed under Section 900(5) of the Revenue Act of 1918. It was not taxed until after the passage of section 609 of the Revenue Act of 1932, when the government attempted to tax it as a game. The act of 1932 became effective June 6, 1932. On August 26, 1932, the Commissioner issued a ruling stating that jigsaw or die cut picture puzzles were not taxable. On November 14, 1932, he issued a ruling that they were taxable. On February 7, 1933, he ruled that after February 7, 1933, they were taxable if they contained more than fifty pieces. And on April 20, 1933, he ruled that they were taxable after June 21, 1932, if they contained more than fifty pieces.'