Wayne Cnty. Produce Co. v. Duffy-Mott Co. Inc

Decision Date23 February 1927
PartiesWAYNE COUNTY PRODUCE CO. v. DUFFY-MOTT CO., Inc.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Action by the Wayne County Produce Company against Duffy-Mott Company, Inc. From a judgment of the Appellate Division (217 App. Div. 781, 216 N. Y. S. 933), affirming by a divided court a judgment of the Special Term, entered on an order granting plaintiff's motion for summary judgment, under civil practice rule 113, defendant appeals.

Affirmed.

Appeal from Supreme Court, Appellate Division, Second department.

A. S. Gilbert and Godfrey Cohen, both of New York City, for appellant.

Edmond B. Butler and Francis X. Carmody, both of New York City, for respondent.

CARDOZO, C. J.

Plaintiff bought from the defendant large quantities of sweet cider. The price was to be 14 1/2 cents per gallon subject to a stated discount, plus the manufacturer's war tax of 10 per cent., which was to be paid in full without discount. For 157,210 gallons bought between November 8, 1920, and August 13, 1921, the payment was $27,514.55, of which $2,501.33 was for the tax. Defendant, the manufacturer, after collecting the amount of the tax from the plaintiff, paid it over to the federal government. In 1922 came a ruling of the courts that sales of sweet cider were not subject to any tax whatever. Monroe Cider Vinegar & Fruit Co. v. Riordan (C. C. A.) 280 F. 624;Casey v. Sterling Cider Co. (C. C. A.) 294 F. 426. The Treasury Department and manufacturers generally had misconstrued an act of Congress (Internal Revenue Act of February 24, 1919, § 628a [U. S. Comp. St. § 6161 1/2d]) whereby a tax of 10 per cent. was levied upon sales of unfermented grape juice and ‘other soft drinks.’ Defendant demanded and obtained a refund of the taxes thus unlawfully collected. The question is whether the money thus refunded by the government is held by the defendant to its own use or to the use of the plaintiff who is suing to get the money back.

We think the plaintiff must prevail. This is not a case where the item of the tax is absorbed in a total or composite price to be paid at all events. In such a case the buyer is without remedy, though the annulment of the tax may increase the profit to the seller Moore v. Des Arts, 1 N. Y. 359. This is a case where the promise of the buyer is to pay a stated price, and to put the seller in funds for the payment of a tax besides. In such a case the failure of the tax reduces to an equivalent extent the obligation of the promise. The form of the transaction was not thoughtless or accidental. It was deliberate and purposed. The end to be served is conceded in the briefs of counsel. If a sum equal to 10 per cent. of the quoted price per gallon had been added to the price as something to be paid at all events, a tax would have been due upon the sum so added as well as upon the residue. A form was adopted whereby the manufacturer was in a position to account to the government at the quoted rate per gallon, and to pay the tax with the excess. The defendant had the benefit of the transaction as thus moulded in its dealings with the government. It is now attempting to set upon the transaction the impress of another quality in its dealings with the plaintiff. We find no evidence in the record to justify the change of front. The quality impressed at the beginning persists until the end.

The contract therefore, in effect, was this and nothing more, that whatever moneys were necessary for the payment of a tax would be furnished by the buyer. Annulment of the tax after the sale and the delivery of an invoice, but before the payment of the price, would have extinguished the seller's right to exact payment from its customer of the added 10 per cent. Payment, if then exacted, would have been no longer payment for a tax, but payment...

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39 cases
  • Anniston Mfg. Co. v. Davis
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • January 8, 1937
    ...obtain a refund for himself. This, they say, is sound doctrine applying in and limited to sales tax cases. Wayne County Produce Co. v. Duffy-Mott Co., 244 N.Y. 351, 155 N.E. 669; Lash's Products Co. v. United States, 278 U.S. 175, 49 S.Ct. 100, 73 L.Ed. Interesting as these questions and di......
  • Smith v. Sparks Milling Co.
    • United States
    • Indiana Supreme Court
    • February 2, 1942
    ...on this point. The court attempted to distinguish the case of Wayne County Produce Company v. Duffy-Mott Company, Inc., 244 N.Y. 351, 155 N.E. 669, from the case under consideration. The said that in the Duffy-Mott case, there was no written contract. This may be true, but however that may ......
  • Cohon v. Oscar L. Paris Co.
    • United States
    • United States Appellate Court of Illinois
    • March 10, 1958
    ...and good conscience belonged to the customers who had paid it. It falls squarely within the rule laid down in Wayne County Produce Co. v. Duffy-Mott Co., 244 N.Y. 351, 155 N.E. 669, in which case the plaintiff bought from the defendant certain quantities of sweet cider at a stated price per......
  • IDEAL CEMENT COMPANY v. United Gas Pipe Line Company
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • November 16, 1960
    ...Mills, 5 Cir., 1937, 87 F.2d 454, 456; Solomon Tobacco Co. v. Cohen, 1906, 184 N.Y. 308, 77 N.E. 257; Wayne County Produce Co. v. Duffy-Mott Co., Inc., 1927, 244 N.Y. 351, 155 N.E. 669. 5 Reported in 176 F.Supp. 6 See also Alabama Code of 1940, Tit. 37 Municipal Corporations, § 754: "It sha......
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