Cheatham Et Al v. United States
| Decision Date | 01 October 1875 |
| Parties | CHEATHAM ET AL. v. UNITED STATES |
| Court | U.S. Supreme Court |
ERROR to the Circuit Court of the United States for the Middle District of Tennessee.
Mr. Henry Cooper for the plaintiff in error.
Mr. Assistant Attorney-General Edwin B. Smith, contra.
Plaintiffs in error paid to the defendant, who was collector of internal revenue, the sum of $32,074 under protest, and brought their suit to recover the money, on the ground that the tax, as assessed, was illegal. It was assessed as income-tax for the year 1864 against the female plaintiff, who was then a widow, named Acklin. The tax originally assessed amounted to $99,726. From this assessment Mrs. Acklin appealed to the Commissioner of Internal Revenue, who, on the 7th of October, 1867, rendered his decision, setting aside that assessment, and directing the local assessor to make a new one, and giving him directions as to the principles on which it should be made. On the fifteenth day of March, 1868, the new assessment was made at the sum of $29,971.91. This sum, with interest and penalty, was paid at three different times, as follows:——
April 30, 1868............... $3,799.00
July 25, 1868................ 20,000.00
Oct. 29, 1868................. 8,275.00
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$32,074.00
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The present suit for the recovery of the money so paid was commenced by a writ of summons, issued Jan. 15, 1869.
The cause being transferred from the State court in which it was commenced to the Circuit Court of the United States for the Middle District of Tennessee, that court, on the trial, instructed the jury that the nineteenth section of the act of July 13, 1866, imposed a condition, without which the plaintiffs could not recover, and was not merely a statute of limitation; and as plaintiffs had not brought this suit within six months from the decision of the commissioner on their appeal, and had taken no appeal from the second assessment, made March 15, 1868, they had no right of action.
The soundness of this construction of the statute is the only question in the case.
The section under consideration (14 Stat. 152) is as follows: —
'That no suit shall be maintained in any court for the recovery of any tax alleged to have been erroneously or illegally assessed or collected until appeal shall have been duly made to the Commissioner of Internal Revenue according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof, and a decision of said commissioner shall be had thereon, unless such suit shall be brought within six months from the time of said decision, or within six months from the time this act takes effect; provided that if said decision shall be delayed more than six months from the date of such appeal, then said suit may be brought at any time within twelve months from the date of such appeal.'
It is quite clear that this suit was not brought within six months from the time of the decision of the commissioner on the appeal of Mrs. Acklin. No appeal was taken at all from the second assessment, under which the money was paid.
The argument of plaintiffs' counsel is, that the appeal was taken from the first assessment; and this is the only appeal necessary to give them a right of action, which right they preserved by paying the modified assessment under protest. As to the period of six months prescribed by the statute within which the suit must be brought, it is said that this is a mere statute of limitation, and that the time under it cannot begin to run until the cause of action accrued, which in this case was not until the money was paid. It is insisted that plaintiffs were not in condition to bring suit until the tax was paid; and that it could not have been intended by Congress that the very short limitation of six months should include any time before the money was paid, during which they had no right of action.
Considered as a statute of limitation, and nothing more, the proposition is not without weight; but we think there are two sufficient answers to it:——
1. The assessment on which this money was paid was a different assessment from the one upon which the appeal to the commissioner was taken. That assessment was wholly set aside. The matter was referred to the local assessor, with directions to make a new assessment. The rules by which this new assessment was to be made were prescribed for him, and differed materially from those which governed the first assessment. The commissioner did not pretend to modify the original, or to reduce it, and let it stand as so modified or reduced. He did not...
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