Angelus Milling Co. v. Nunan

• Decision Date: 04 December 1944
• Docket Number: No. 156.,156.
• Parties: ANGELUS MILLING CO. v. NUNAN, Commissioner of Internal Revenue.
• Court: U.S. Court of Appeals — Second Circuit

144 F.2d 469 (1944)

ANGELUS MILLING CO. v. NUNAN, Commissioner of Internal Revenue.

No. 156.

Circuit Court of Appeals, Second Circuit.

July 6, 1944.

Writ of Certiorari Granted December 4, 1944.

Prew Savoy, of Washington, D. C., for petitioner.

F. E. Youngman, Sp. Asst. Atty. Gen., Samuel O. Clark, Jr., Asst. Atty. Gen., and Sewall Key and A. F. Prescott, Sp. Asst. Attys. Gen., for respondent.

Before L. HAND, SWAN, and FRANK, Circuit Judges.

Writ of Certiorari Granted December 4, 1944. See 65 S.Ct. 268.

L. HAND, Circuit Judge.

The Angelus Milling Company appeals from an order of the Tax Court of the United States, dismissing for lack of jurisdiction, a proceeding originally filed with the Processing Tax Board of Review, for the refund of a processing tax paid by it in compliance with the Agricultural Adjustment Act, 7 U.S.C.A. § 601 et seq. On August 20, 1941, the company filed its petition with the Board to review the Commissioner's disallowance of its claim for refund. The Commissioner moved to dismiss the proceedings for lack of jurisdiction, and this motion was denied on August 5, 1942. On August 21st of that year, he filed his answer, again setting up lack of jurisdiction. Congress abolished the Board on December 31, 1942, and transferred its jurisdiction to the Board of Tax Appeals — now the Tax Court of the United States — and on January 29, 1943, the Commissioner renewed his motion which this time the Tax Court granted on May 4, 1943. This appeal (petition to review) followed. The ground of dismissal was that the petitioner had never filed an adequate claim for refund, as allowed by § 903 of Title 7 of the Revenue Act of 1936, 7 U.S.C.A. § 645, and by the regulations promulgated thereunder: Articles 202, 601, 603, and 605, of Regulations 96.

The facts were as follows. The Angelus Milling Company is a New York corporation, having its principal office in Niagara Falls, New York; until June 13, 1933 it was known as "Middleport Flour Mills, Inc." The Niagara Falls Milling Company, Inc. is a similar corporation; and between July 9, 1933 and January 6, 1936, both companies were processors of wheat within the meaning of the statute. Throughout that period they had one and the same majority shareholder, the same president, the same officers, a common set of books of account, a joint bank account, and the same employees. On these books each company was charged with the cost of the wheat bought for it, and the cost of its manufacture, etc., and was credited with the selling price. Between July 9, 1933 and January 31, 1935, they filed with the Collector joint returns on account of their operations as processors, and paid over $324,000 in processing taxes. Between February 1, 1935 and November 30, 1935, the Niagara Company filed returns for itself and the Angelus Company, and paid the Collector $110,000. The Agricultural Adjustment Act was declared unconstitutional on January 6, 1936 (United States v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914), and on June 23, 1936, three claims were filed with the Commissioner, all stating the name of the taxpayer and claimant as "Niagara Falls Milling Company, Inc. and/or Middleport Flour Mills, Inc." (We shall call these claims: A-1, A-2 and A-3.) A-1 was for $57,875.45, payments made by the Niagara Falls Milling Company between July 31, 1933 and December 30, 1933; A-2 was for $244,895.40, payments made by that company between January 29, 1934 and December 31, 1934; and A-3 was for $131,274.42, payments made by that company between January 30, 1935 and December 12, 1935. The total of these is $434,045.27.

The Angelus Company does not assert that these claims conformed with the statute or regulations; but while they were still undetermined, on June 30, 1937, the Niagara Company filed a claim for refund on its own behalf alone in the sum of $436,231.73, for payments made between July 15, 1933 and December 30, 1935. This claim (which we shall call Claim B), was in proper form, and the Commissioner had power to consider it, though only as a claim of the Niagara Company. Although the amount claimed differs by about $2000 from the aggregate of the amounts claimed in Claims A-1, A-2 and A-3, it was apparently intended to cover the processing taxes paid by both companies. On August 15, 1938, the Angelus Company filed a claim on its own behalf for the refund of $145,839.12 (which we shall call Claim C). This was not in proper form; it complied in no way with the regulations, it merely contained, as an appendix, an apportionment between the Angelus Company and the Niagara Company of the aggregate to a penny of the amounts claimed in Claims A-1, A-2 and A-3. In an attached affidavit it declared that it "was originally filed * * * in the name of the Niagara Falls Milling Company and/or Middleport Flour Mills, Inc." It was an attempt apparently to perfect or amend Claims A-1, A-2 and A-3. On May 24, 1941, the Commissioner rejected Claim C on the ground that it was incomplete under the regulations, and did not give him jurisdiction; and it is plain that neither Claims A-1, A-2 and A-3, taken together, nor Claim C taken in conjunction with them were in any way sufficient and that no award could have been made under them. Lee Wilson & Co. v. Commissioner, 8 Cir., 111 F.2d 313; Id., 123 F.2d 232. The Angelus Company answers this objection in two ways. First, it says that the Commissioner considered its claim upon the merits, and by doing so gave the taxpayer to suppose that he meant to consider the claim as it stood; and that this conduct "estopped" him from later rejecting it for irregularities of form. Second, it says that the five claims: A-1, A-2, A-3, B and C, which were all pending at the same time, collectively made an adequate claim by cross reference to one another, and should have been read together, in which case their meaning was plain.

The evidence upon which the company seeks to support the claim of "estoppel" is as follows. On November 18, 1938, the General Deputy Collector addressed a letter to the company's president at that time, Dickinson, asking leave to examine its records for the years 1935 and 1936, including its ledgers and minute books. This was granted. The company submitted two affidavits in opposition to the Commissioner's motion: one by O'Connor, its president at a later time; another by Lyon, a certified public accountant. In his affidavit O'Connor swore that he had procured photostatic copies of the "working papers" of two "representatives" of the Bureau of Internal Revenue, who examined the Angelus Company's records at the time they were examining those of the Niagara Company — a fairly obvious inference anyway, since there was only one set of records. These two officials, O'Connor swore, "investigated the claim for refund, of the Angelus Milling Co., Inc., on its merits and sent Angelus Milling Co., Inc. a formal rejection of the claim on May 21, 1941." In his affidavit Lyon swore that on September 4, 5, 6 and 7, 1940, on behalf of the Angelus Company he had conferences with "representatives" of the Bureau "with respect to the claim for refund of processing taxes filed * * * on or about August 15, 1938. There were four or five representatives * *...