Bushmiaer v. United States, 15420.

• Decision Date: 21 February 1956
• Docket Number: No. 15420.,15420.
• Citation: 230 F.2d 146
• Parties: W. S. BUSHMIAER and Russell L. Myers, co-executors of the estate of J. W. Myers, deceased, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

230 F.2d 146 (1956)

W. S. BUSHMIAER and Russell L. Myers, co-executors of the estate of J. W. Myers, deceased, Appellants, v. UNITED STATES of America, Appellee.

No. 15420.

United States Court of Appeals Eighth Circuit.

February 21, 1956.

William H. Bowen, Little Rock, Ark. (Mehaffy, Smith & Williams, Little Rock, Ark., on the brief), for appellants.

Harry Marselli, Attorney, Department of Justice, Washington, D. C. (H. Brian Holland, Asst. Atty. Gen., Ellis N. Slack and David O. Walter, Attorneys, Department of Justice, Washington, D. C., Charles W. Atkinson, U. S. Atty., and Robert E. Johnson, Asst. U. S. Atty., Fort Smith, Ark., on the brief), for appellee.

Randolph W. Thrower and Sutherland, Asbill & Brennan, Atlanta, Ga., amici curiae.

Before GARDNER, Chief Judge, and WOODROUGH and VOGEL, Circuit Judges.

GARDNER, Chief Judge.

This was an action brought by appellants W. S. Bushmiaer and Russell L. Myers in their representative capacities as co-executors of the estate of J. W. Myers, deceased, to recover $5,000.00 of additional income taxes paid for the years 1942 and 1943 by the estate in partial satisfaction of a deficiency assessment with civil fraud penalties of $94,485.63 for 1942 and $43,503.65 for 1943. The appellants will be referred to as plaintiffs and appellee as defendant.

Plaintiffs alleged in their complaint that for the year 1942 agents of the government made an illegal and erroneous assessment of an additional income tax against the estate, that thereafter and on or about December 16, 1954 plaintiffs paid the sum of $2,500.00 in partial satisfaction of the additional assessed tax liability for the year 1942, following which payment they duly filed claim for refund for $2,500.00 which claim was in due course disallowed. By Count II of their complaint they charged that for the year 1943 agents of the government had similarly illegally and erroneously assessed additional income taxes against the estate and that they had paid $2,500.00 in partial satisfaction of said additional assessed tax liability for the year 1943 and thereafter duly filed a claim for refund of the amount so paid which claim was in due course disallowed.

They demanded a jury trial and judgment on each count of the complaint in the sum of $2,500.00 with interest thereon as provided by law together with their costs and disbursements in the action.

Defendant moved to dismiss the complaint on the grounds that:

"I

"The plaintiffs\' complaint fails to state a claim within the jurisdiction of this Court and fails to state a claim upon which relief may be granted for the reason that the complaint shows on its face plaintiffs have not paid all of the federal income tax assessed against the estate of their decedent, part of which they seek to recover in this action.

"II

"That paragraph 4 of plaintiffs\' complaint admits they have made payments of $2,500 in partial satisfaction of the assessed tax liability for each of the years 1942 and 1943.

"III

"That the federal income tax liability of the dedecent, J. W. Myers, for the years 1942 and 1943 is in the respective amounts of $94,485.63 and $43,503.65, of which plaintiffs paid only $5,000 on or about December 16, 1954, and there remains due and owing on the account of said tax liability a balance of $91,985.63 and $41,003.65, respectively, for each of the years involved, with interest according to law.

"In support of the foregoing there are attached hereto as Exhibits A and B to this motion photostatic copies of the following: The Commissioner\'s ninety-day letter, dated October 1, 1954, addressed to the Estate of J. W. Myers, Deceased, Van Buren, Arkansas, and Certificate of Assessments and Payments, signed by Olin S. Godwin, District Director, showing the tax assessed and paid and the outstanding amounts remaining unpaid for each of the years in question.

"The defendant further respectfully shows the Court that this is a suit against the United States and the statutory requisites to the bringing of a suit for refund of taxes in the District Court make it clear that the full assessed tax must first be paid."

The court expressing the view that it was without jurisdiction to hear and determine plaintiffs' action because they had not paid the full amount of the additional assessment made by the agents of the defendant prior to the commencement of the action entered its order sustaining defendant's motion and dismissed plaintiffs' complaint for the reason that it failed to state a claim within the jurisdiction of the court. From this judgment of dismissal plaintiffs prosecute this appeal alleging error in that: (1) The plain, unambiguous language of Title 28 U.S.C.A. § 1346(a) (1) and (2), as amended, vested the trial court with jurisdiction of this action, and the statute must be taken to mean what it says; (2) All the cases in which this question was presented held that the trial court had jurisdiction of the cause; (3) Congressional re-enactment of the Tucker Act with liberal rather than restrictive changes reflects legislative adoption of the Coates v. United States case; (4) Suits for refund of taxes paid in this circumstance in no way burden the Treasury Department in its collection of revenue; and (5) A consideration of the many ways in which the government has waived its immunity from suit, even absent the authorities hereinbefore considered, makes it clear that a literal, if not a liberal, interpretation of the language of Title 28 U.S.C.A. § 1346(a) (1) is required.

The so-called Tucker Act as originally passed by Congress in 1887 in effect waived the government's immunity from suit in a large class of cases and conferred jurisdiction upon United States District Courts to sit as Courts of Claim, concurrent with the Court of Claims, of "all claims founded upon the Constitution of the United States or any law of Congress." Act of March 3, 1887, c. 359, Secs. 1 and 2, 24 Stat. 505. The act was not materially amended until 1911 when by amendment the Circuit Courts were abolished and their jurisdiction vested in the District Courts. Act of March 3, 1911, c. 231, Sec. 24, 36 Stat. 1087. This amendment raised the jurisdictional monetary ceiling of the District Courts from $1,000.00 to $10,000.00. The next material change in the Tucker Act occurred in 1921 at which time the act was amended so as to provide that District Courts should possess jurisdiction:

"`Concurrent with the Court of Claims, of any suit or proceeding, commenced after the passage of the Revenue Act of 1921 for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected, under the internal-revenue laws, even if the claim exceeds $10,000, if the collector of internal-revenue by whom such tax, penalty, or sum was collected is dead at the time such suit or proceeding is commenced.\'" Revenue Act of 1921, c. 136, Sec. 1310(c), 42 Stat. 311.

In 1924 the act was re-enacted without change and in 1925 there were slight changes not here material. In 1954 the Tucker Act, as re-enacted, contains the following provisions with reference to the jurisdiction of District Courts in internal revenue tax cases:

"The district courts shall have original jurisdiction, concurrent with the Court of Claims, of:

"(1) Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws;" 28 U.S.C.A. § 1346(a) (1).

So far as the provisions of the Tucker Act are concerned the development by which it reached the form embodied in the 1954 act is not, we think, of the utmost importance as the 1954 act had been adopted prior to the initiation of this action which sought to invoke the jurisdiction of the District Court. That act in plain and unambiguous terms specifically confers jurisdiction on the District Courts of:

"Any civil action against the United States for the recovery of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected, or any penalty claimed to have been collected without authority or any sum alleged to have been excessive or in any manner wrongfully collected under the internal-revenue laws."

The present action would seem to come within the ambit of the above quoted provision. Even before the amendment of 1921 the Supreme Court had held that the District Courts had jurisdiction of actions to recover internal revenue taxes illegally collected because these claims were founded upon a law of Congress. In United States v. Hvoslef, 237 U.S. 1, 35 S.Ct. 459, 461, 59 L.Ed. 813, Mr. Justice Hughes speaking for the Supreme Court, among other things, said:

"* * * and it follows that these claims must be deemed to be founded upon a `law of Congress\' within the meaning of the provisions of the Tucker act, now incorporated in the Judicial Code."

The motion to dismiss was based not only on the charge that the court was without jurisdiction but upon the allegation that the complaint did not state a claim upon which relief might be granted. The court granted the motion upon the first ground but if it should have been granted upon the ground that the complaint did not state a claim upon which relief might be granted the judgment of the court would be correct even though the court may have given an erroneous ground for its action. McGivern v. Northern Pac. Ry. Co., 8 Cir., 132 F.2d 213; Standard Oil Co. v. Lyons, 8 Cir., 130 F.2d 965; Stolte v. Larkin, 8 Cir., 110 F.2d 226. It is therefore necessary to consider whether the complaint stated sufficient facts to entitle plaintiffs to any relief. It was the contention of defendant in the trial...