The Metropolitan Opera House in New York City is owned by a corporation which leased it to the producing company. The use of all the parterre boxes was reserved by the lessor, with the privilege of six free admissions to each box at every performance. Before the passage of the Revenue Law of 1918, the lessor conferred upon Georgine Iselin, as owner of 300 of its shares, a license so to use a designated parterre box. During the season of 1919-20, being authorized so to do, she sold through a personal agent the license to use her box for 47 of the 70 performances given during the season, and received therefor $9,525 net after deduction of the agent's commissions. On the amount received Miss Iselin was assessed a tax of $3,352.50, under paragraph 3 of section 800 (a) of the Revenue Act of 1918, Act of February 24, 1919, c. 18, 40 Stat. 1057, 1120-1121 (Comp. St. Ann. Supp. 1919, s 6309 5/8 a). She paid the amount under protest and presented a claim that it be refunded. The Commissioner of Internal Revenue rejected the application, holding that the tax was payable under paragraph 4 of that act. Then Miss Iselin brought this suit in the Court of Claims to recover the amount. A judgment dismissing the petition, rendered upon findings of fact, was entered May 5, 1924. 59 Ct. Cl. 654. The case is here on appeal under section 242 of the Judicial Code (Comp. St. § 1219).
Paragraph 3 of section 800(a), under which the tax was assessed, provides:
'Upon tickets or cards of admission to theaters, operas, and other places of amusement, sold at news stands, hotels, and places other than the ticket offices of such theaters, operas, or other places of amusement, at not to exceed 50 cents in excess of the sum of the established price therefor at such ticket offices plus the amount of any tax imposed under paragraph (1), a tax equivalent to 5 per centum of the amount of such excess; and if sold for more than 50 cents in excess of the sum of such established price plus the amount of any tax imposed under paragraph (1), a tax equivalent to 50 per centum of the whole amount of such excess, such taxes to be returned and paid, in the manner provided in § 903, by the person selling such ticket.'
Neither stockholders' boxes nor tickets to them were on sale at any ticket office, as all the parterre boxes were reserved by the lease for the stockholders. For this reason there was no regular or established price for parterre boxes. Nor was any other box exactly like them on sale. Each sale of a stockholders' box or tickets was made as the individual transaction of a particular stockholder, for a particular performance, and to a designated purchaser. The price paid varied widely for different performances. There was, above the parterre boxes, a tier of boxes, known as the grand tier. These boxes, which were on sale at the ticket office, also had seats for six persons, were uniform in size with the stockholders' boxes, and were otherwise similar. The ticket office price for grand tier boxes was $60 for each performance. The Commissioner of Internal Revenue, though sustaining the tax under paragraph 4, assessed the tax under paragraph 3, apparently on the theory that Congress intended to tax sales of boxes like the plaintiff's; that, since there was no 'regular established price or charge' for boxes exactly like hers, and no such boxes were sold at the ticket office, the basis for taxation should be sought in the established price for the class of boxes actually on sale most like hers; that it should therefore be assumed that the box office price for the similar grand tier boxes was the 'established price at the ticket offices' of parterre boxes; and that, with such price as a standard, the calculation involved in determining the item of 'any tax imposed by paragraph (1),' and in assessing the supertax under paragraph (3) should be made.