Higgins Mfg. Co. v. Page, 270.
| Citation | 20 F.2d 948 |
| Decision Date | 18 July 1927 |
| Docket Number | No. 270.,270. |
| Parties | HIGGINS MFG. CO. v. PAGE. |
| Court | United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Rhode Island |
Wilson, Churchill & Curtis and Alexander L. Churchill, all of Providence, R. I., for complainant.
Fred B. Perkins, Asst. U. S. Atty., of Providence, R. I., for respondent.
This bill in equity was brought to restrain the collector of internal revenue for the district of Rhode Island from collecting a tax, alleged to be due under an act of Congress relating to oleomargarine, on "Higgins' Nut Product." The defendant filed a motion to dismiss.
In the year 1922 the defendant notified the plaintiff that he was going to collect a tax on the product known as "Nut-Z-All," after all of it which had then been made had been exhausted. The plaintiff paid the tax on a small quantity of this compound, and sued to get it back. Judge Brown in a very careful opinion (Higgins Mfg. Co. v. Page D. C. 297 F. 644) decided that the tax was not due, as the act of Congress did not subject the plaintiff's compound to a tax. There was no appeal from this decision.
The bill of complaint in the case at bar — the allegations of which are admitted by the motion to dismiss — alleges that the compound now known as "Higgins' Nut Product" is the same as "Nut-Z-All," that the way in which it is put up is the same, and that all the circumstances of the case are identical with the one decided by Judge Brown. The bill further alleges that the defendant has notified the plaintiff that on the 1st of October, 1927, he will collect a tax of 10 cents a pound on Higgins' Nut Product under the oleomargarine statute. We have, therefore, a case where the collector of internal revenue for the district of Rhode Island is threatening to take action which the court for that district has held to be illegal.
At the hearing it was contended by the defendant that under Revised Statutes, § 3224 (Comp. St. § 5947), the court had no power to restrain the collection of the tax. This raises a serious question. It is alleged in the bill — and admitted by the motion to dismiss — that, if the tax is laid and collected, the business of the plaintiff will be ruined, because in an action at law, brought after paying the tax, it cannot recover adequate damages. The tax is so high that the plaintiff cannot afford to manufacture the compound, pay the tax, and sell the article, and the alternative is to stop making it and destroy an established business.
It is true, of course, that except under extraordinary circumstances a court cannot interfere with the assessment and collection of a tax. See Graham v. Du Pont, 262 U. S. 234, 43 S. Ct. 567, 67 L. Ed. 965, and cases cited. But the Supreme Court of the United States has said, in Hill v. Wallace, 259 U. S. 44, 42 S. Ct. 453, 66 L. Ed. 822:
"It has been held by this court, in Dodge v. Brady, 240 U. S. 122, 126 36 S. Ct. 277, 60 L. Ed. 560 that section 3224 of the Revised Statutes does not prevent an injunction in a case apparently within its terms in which some extraordinary and entirely exceptional circumstances make its provisions inapplicable." 259 U. S. at page 62, 42 S. Ct. 456, 66 L. Ed. 822.
See, also, Acklin v. People's Sav. Ass'n (D. C.) 293 F. 392, 394; Lafayette Worsted Co. v. Page (D. C.) 6 F.(2d) 399.
It is true, as contended by the defendant, that the statement was not necessary for ...
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Martin v. Andrews
...In our view, the extremely aggravated circumstances of the Nut Margarine case have no counterpart in the instant case. Higgins Mfg. Co. v. Page, D.C.R.I., 20 F.2d 948, also cited by appellant, involved substantially the same circumstances as were before the court in the Nut Margarine The re......