Christie-Street Commission Co. v. United States

• Decision Date: 27 March 1905
• Docket Number: 2,094.
• Citation: 136 F. 326
• Parties: CHRISTIE-STREET COMMISSION CO. v. UNITED STATES.
• Court: U.S. Court of Appeals — Eighth Circuit

136 F. 326

CHRISTIE-STREET COMMISSION CO. v. UNITED STATES.

No. 2,094.

United States Court of Appeals, Eighth Circuit.

March 27, 1905

Syllabus by the Court

A claim to recover back internal taxes illegally exacted under a misconstruction of the war revenue law of 1898 (Act June 27 1898, c. 503, Sec. 1, 30 Stat. 494 (U.S.Comp.St. 1901, p 752)) is a claim founded upon a law of Congress within the meaning of the act of March 3, 1887 (chapter 359, Sec. 1, 24 Stat. 505, U.S.Comp.St. p. 752) and it may be enforced by an action directly against the United States under that act after it has been presented to the Commissioner of Internal Revenue, whether it has received his approval or not, and whether it is an action on a contract or an action sounding in tort.

Specific legislation upon a single subject and a general law relative to that and other subjects must stand together, unless clearly repugnant, the one as the law of the particular subject, and the other as the general law of the land.

The limitation of two years prescribed by section 3227 of the Revised Statutes (U.S. Comp. St. 1901, p. 2089) for the commencement of actions to recover back internal taxes illegally exacted is not inconsistent with, and is not repealed by, the act of March 3, 1887 (chapter 359, Sec. 1, 24 Stat. 505 (U.S.Comp.St. 1901, p. 752), which provides that no suits shall be allowed under that law unless they are brought within six years after the causes of action respectively accrue.

An action against the United States upon a claim to recover back internal taxes illegally collected, which has been presented to, but has not been approved by, the Commissioner of Internal Revenue, is barred by section 3227, Rev. St. (U.S Comp. St. 1901, p. 2089), two years after the cause of action accrues.

On Nobember 30, 1902, the plaintiff, a corporation engaged in the business of dealing in stocks, bonds, grain, provisions, and merchandise, filed a complaint against the United States in the Circuit Court of the Western District of Missouri to recover back $4,811.76, which it alleged the collector of internal revenue had unlawfully exacted from it, against its protest, by threats and duress, between July 1, 1898, and August 15, 1899, under a misconstruction of the act of June 13, 1898, 'to provide ways and means to meet war expenditures and for other purposes.' 30 Stat. 448, c. 448, U.S.Comp.St. 1901, p. 2286. The plaintiff also averred that the Commissioner of Internal Revenue subsequently decided that the moneys thus collected had been erroneously taken; that he agreed to repay them; that thereupon, on December 9, 1899, the plaintiff presented its claim to him for the repayment of the moneys, but the Commissioner never either allowed or disallowed the claim. A demurrer to this complaint was sustained, and the action was dismissed on the ground that it was an action sounding in tort, and also that, if it was an action upon a contract, it was barred by the limitation of two years fixed by Act June 6, 1872; c. 315, Sec. 14, 17 Stat. 257, Rev. St. Sec. 3227, 2 U.S.Comp.St. 1901, p. 2089.

Jas. H. Harkless (Chas. S. Crysler and Clifford Histed, on the brief), for plaintiff in error.

A. S. Van valkenburg (Wm. Warner, on the brief), for the United States.

Before SANBORN and HOOK, Circuit Judges, and RINER, District Judge.

SANBORN Circuit Judge, after stating the case as above, .

The case presents two questions: May one whose claim for a repayment of internal taxes illegally collected has been presented to, but has not been allowed by, the Commissioner of Internal Revenue (section 3226, Rev. St., 2 U.S.Comp.St. 1901, p. 2088) maintain an action against the United States to recover these taxes under the act of March 3, 1887 (24 Stat. 505, c. 359, 1 U.S.Comp.St. 1901, pp. 752, 753)? If so, does the limitation of two years fixed by section 3227, Rev. St., U.S. Comp. St. 1901, p. 2089, or the limitation of six years provided by section 1 of the act of 1887, fix the time within which the action may be successfully brought?

Sections 3220, 3226, 3227, Rev. St., U.S. Comp. St. 1901, pp. 2086, 2088, 2089, are a part of the system of laws enacted by Congress for the collection of the taxes imposed to obtain the internal revenue of the government, and to adjust the claims for excessive payments exacted by the officers of the nation. By these sections the Commissioner of Internal Revenue is authorized to--

'Pay back all taxes erroneously or illegally assessed or collected * * * also to repay to any collector or deputy collector the full amount of such sums of money as may be recovered against him in any court, for any internal taxes collected by him. ' Section 3220.

They also provide that:

'No suit shall be maintained in any court for the recovery of any internal tax alleged to have been erroneously assessed or collected * * * until appeal shall have been duly made to the Commissioner of Internal Revenue * * * and a decision of the Commissioner has been had therein; provided: that if such decision is delayed more than six months from the date of such appeal, then the said suit may be brought, without first having a decision of the Commissioner at any time within the period limited in the next section. ' Section 3226.

Section 3227 declares that:

'No suit or proceeding for the recovery of an internal tax alleged to have been erroneously or illegally assessed or collected * * * shall be maintained in any court unless the same is brought within two years next after the cause of action accured.'

The act of March 3, 1887, was conceived and passed with no special reference to claims for taxes illegally collected for revenue purposes, but to authorize the adjudication of four general classes of claims against the United States in the Court of Claims and in the Circuit and District Courts- It have to those courts jurisdiction of--

'All claims (1) founded upon the Constitution of the United States or any law of Congress, except for pensions; (2) or upon any regulation of an executive department; (3) or upon any contract, express or implied, with the government of the United States; (4) or for damages, liquidated or unliquidated, in cases not sounding in tort, in respect of which claims the party would be entitled to redress against the United States either in a court of law, equity or admiralty, if the United States were suable. ' Chapter 359, Sec. 1, 24 Stat. 505, 1 U.S.Comp.St. 1901, p. 752.

It is conceded on all sides that, if this action can be sustained at all, it is because it is of the first class, and that its maintenance is conditioned by the true answer to the inquiry whether or not it is 'founded upon any law of Congress. ' Counsel for the defendant argue that it is an action for wrongfully exacting from the plaintiff moneys which it was not legally required to pay, in violation of the general rule which forbids the taking of property without right or compensation; that it has no relation or reference to the revenue law of 1898, but that it is an action sounding in tort; and that the proposition that it is founded upon any law of Congress is without authority or reason to support it. In support of this view they call attention to the fact that the act of February 24, 1855 (10 Stat. 612), granted to the Court of Claims the same jurisdiction over every cause of action founded upon any law of Congress which is vested in that court and in the Circuit and District Courts of the United States by the act of 1887, and to the earlier decisions of the Supreme Court to the effect that under this statute, and under the provisions of sections 3220-3228, Rev. St., U.S. Comp. St. 1901, pp. 2086-2089, actions for taxes erroneously collected could be maintained against the United States only when the claims for them had been allowed by the Commissioner (U.S. v. Kaufman, 96 U.S. 567, 569, 24 L.Ed. 792), while, in cases in which the Commissioner had refused or neglected to approve the claims, the only remedy was an action against the collector for the tortious taking of the money. U.S. v. Savings Bank, 104 U.S. 728, 734, 26 L.Ed. 908. A careful examination of the opinions in these cases, however, discloses the fact that they rest on the distinction between actions ex contractu and actions ex delicto, and upon the theory that the allowance of a claim by the Commissioner constitutes a meeting of the minds of the nation and the claimant, and thus raises the implication of a contract, upon which a cause of action may be maintained, while a refusal or a neglect of the Commissioner to approve the claim raises no such implication, and leaves the action one sounding in tort. The opinions in the authorities here cited fail to consider the real question in this case-- whether such claims are of the first class specified in the acts of 1855 and 1887, of the class of claims founded on the Constitution or upon a law of Congress-- and are devoted exclusively to the discussion of the issue whether or not they fall within the third class, in the class of claims founded upon any contract, express or implied, with the government.

The analogous rulings that an action may be maintained against the United States for property which it takes without claim or color of title, because the law implies a contract to return it or to pay its value (U.S. v. Great Falls Mfg Co., 112 U.S. 645, 5 Sup.Ct. 306, 28 L.Ed. 846; U.S. v. Lynah, 188 U.S. 445, 23 Sup.Ct. 349, 47 L.Ed. 539), while the seizure of property to which it claims title will not sustain such an action, because a taking of this nature raises no such implication (Langford v. U.S., 101 U.S. 341, 25 L.Ed. 1010; Hill v. U.S., 149 U.S. 593, 13 Sup.Ct. 1011, 37 L.Ed. 862; Schillinger v. U.S., 155 U.S. 163, 15 Sup.Ct. 85, 39 L.Ed. 108), are...