Champ Spring Co. v. United States, 8835.

• Citation: 47 F.2d 1
• Decision Date: 23 March 1931
• Docket Number: No. 8835.,8835.
• Parties: CHAMP SPRING CO. v. UNITED STATES.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

47 F.2d 1 (1931)

CHAMP SPRING CO. v. UNITED STATES.

No. 8835.^*

Circuit Court of Appeals, Eighth Circuit.

February 14, 1931.

Rehearing Denied March 23, 1931.

C. P. Fordyce and Chase Morsey, both of St. Louis, Mo. (Walter R. Mayne, of St. Louis, Mo., Henry J. Richardson, of Washington, D. C., and Fordyce, Holliday & White, of St. Louis, Mo., on the brief), for appellant.

Frank J. Ready, Jr., Sp. Atty., Bureau of Internal Revenue, of Washington, D. C. (Louis H. Breuer, U. S. Atty., of Rolla, Mo., Claude M. Crooks, Asst. U. S. Atty., of St. Louis, Mo. and C. M. Charest, Gen. Counsel, Bureau of Internal Revenue, of Washington, D. C., on the brief), for the United States.

Before STONE and GARDNER, Circuit Judges, and WYMAN, District Judge.

GARDNER, Circuit Judge.

This is an action brought by the appellant as plaintiff below against the United States to recover $22,975.76 as for money had and received. No questions are raised on the pleadings. The action was brought under the provisions of the so-called Tucker Act, subdivision 20 of section 41, title 28, USCA. This provision of the act specifically provides that all suits brought thereunder shall be tried by the court without a jury. The action was tried on a stipulation of facts and certain oral testimony, and it is not claimed that there is any dispute as to the facts.

During the period from February 24, 1919, to June 30, 1922, plaintiff was engaged in the manufacture and sale of leaf springs, and during said period made monthly returns of its sales and paid a tax of 5 per cent., shown to be due by said returns, the total payments so made amounting to $34,403.03. On August 8, 1922, the then Commissioner of Internal Revenue promulgated a rule to the effect that automobile leaf springs such as were manufactured by plaintiff were not taxable under the provisions of the Revenue Law, and thereupon the plaintiff filed a claim for refund of the taxes so paid by it, together with interest, which claim was allowed and the moneys so received on account of said taxes were returned to the plaintiff. On December 17, 1923, the Commissioner promulgated a tax ruling, reversing his former ruling, holding that the leaf springs used on automobiles were subject to the tax. The Commissioner then attempted to make another assessment against the plaintiff in the total sum of $35,491.67, the amount refunded, and on or about January 15, 1924, demanded payment thereof from plaintiff. This supplemental assessment covered the same sales of leaf springs during the period above mentioned, with respect to which plaintiff's claim for refund had been allowed and paid. The Commissioner thereafter abated $12,515.91 of this supplemental assessment on the ground that such portion of the assessment was barred by the statute of limitations, leaving a balance of $22,975.76. This amount was collected from the plaintiff in installments; the first installment of $500 being paid April 4, 1924, the second installment of $500 being paid May 2, 1924, and the third installment of $21,975.76 being paid June 5, 1925, receipts being issued by the former collector of internal revenue for said payments, reciting on their face that the payments were made under protest, and it was claimed that the payments were made under threat of distraint. The lower court determined as a matter of law that the plaintiff was not entitled to recover, and, from a judgment dismissing its action, this appeal is prosecuted.

The taxes in the first instance were properly collected as excise taxes. Universal Battery Co. v. United States, 281 U. S. 580, 50 S. Ct. 422, 74 L. Ed. 1051. The refund to the plaintiff was therefore erroneous, and the government might have maintained an action for the recovery of these government funds so erroneously paid to the plaintiff. Talcott v. United States (C. C. A.) 23 F.(2d) 897, 901; Kelley v. United States (C. C. A.) 30 F.(2d) 193; United States v. Standard Spring Mfg. Co. (D. C.) 23 F.(2d) 495; United States v. Bartron (D. C.) 35 F.(2d) 765; Wisconsin Central R. R. Co. v. United States, 164 U. S. 190, 17 S. Ct. 45, 51, 41 L. Ed. 399.

In Talcott v. United States, supra, decided by the Circuit Court of Appeals of the Ninth Circuit, it is said: "They (the authorities cited) establish the principle that it is immaterial whether payments which are thus sought to be recovered were made under mistake of law or mistake of fact, that the only question is whether they were paid without legal authority or legal liability therefor, and that the repayment to a taxpayer of a sum paid for taxes is not a final determination of his right to receive the same, that the government may recover as for money had and received all payments illegally paid by a public officer, and that the decisions of executive officers in making such payments are not judicial and are not binding on a court. United States v. Burchard, 125 U. S. 176, 8 S. Ct. 832, 31 L. Ed. 662."

The rule of law is stated by the Supreme Court of the United States in Wisconsin Central R. R. Co. v. United States, supra, as follows: "As a general rule, and on grounds of public policy, the government cannot be bound by the action of its officers, who must be held to the performance of their duties within the strict limits of their legal authority, where, by misconstruction of the law under which they have assumed to act, unauthorized payments are made."

It is to be observed also that, at the time the revenue officer demanded and received repayment of the...