Cleveland Chair Co. v. United States, 75-1451.
| Decision Date | 08 December 1975 |
| Docket Number | No. 75-1451.,75-1451. |
| Citation | 526 F.2d 497 |
| Parties | CLEVELAND CHAIR COMPANY and William R. Jackson, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Richard Jahn, Tanner & Jahn, Chattanooga, Tenn., for plaintiffs-appellants.
John L. Bowers, U.S. Atty., Chattanooga, Tenn., Scott P. Crampton, Gilbert E. Andrew, Richard A. Scully, David English Carmack, Alfred S. Lombardi, Tax Div., Dept. of Justice, Washington, D.C., for defendant-appellee.
Before PHILLIPS, Chief Judge, and CELEBREZZE and McCREE, Circuit Judges.
This litigation is a sequel to Jackson v. Commissioner, 380 F.2d 661 (6th Cir. 1967), cert. denied, 389 U.S. 1015, 88 S.Ct. 591, 19 L.Ed.2d 661 (1967). In the earlier case this court affirmed a United States Tax Court decision upholding an income tax assessment of approximately $1,400,000.
As a condition of stay of assessment and collection of taxes pending appeal in the former case, the taxpayers were required by the Tax Court to post security pursuant to 26 U.S.C. § 7485. United States Treasury notes in the amount of $995,000 were deposited with the Clerk of the United States Tax Court on October 21, 1965. These notes were deposited in lieu of appeal and supersedeas bonds pursuant to 6 U.S.C. § 15.
The Clerk issued a receipt to the taxpayers for the treasury notes and forwarded the notes to the Treasurer of the United States for safekeeping as provided by 6 U.S.C. § 15. The notes matured in accordance with their terms on April 21, 1966. The original treasury notes were allowed to remain on deposit after their maturity date until May 3, 1967, without having been converted or reinvested. As a result, the taxpayers received no interest on these notes during the 377 day period the matured notes remained in the custody of the Treasurer of the United States. The United States had the use of the funds represented by the notes without payment of interest. The taxpayers were required to pay interest on their tax deficiency, including interest for the 377 day period during which the matured treasury notes remained on deposit.
On December 18, 1970, the plaintiffs-appellants in the present suit filed claims with the Internal Revenue Service seeking recovery of the alleged overpayment of taxes to the extent of the interest lost upon their matured treasury notes. These claims were denied by the District Director of Internal Revenue.
This action thereupon was filed by the taxpayers, seeking recovery of $61,877.01. Chief District Judge Frank W. Wilson held that the District Court had no jurisdiction and transferred the case to the Court of Claims pursuant to 28 U.S.C. § 1406(c), directing that the litigation "shall thereafter proceed as if it had been there filed in the Court of Claims on the same date as this case." The District Court stayed the transfer to the Court of Claims, pending disposition of this appeal.
We affirm.
In the District Court five legal theories were asserted as a basis for recovery: (1) A claim for overpayment of income taxes; (2) a claim for breach of duty by the United States as pledgee holding its own obligations as security; (3) a claim for breach of duty by the United States as a fiduciary holding its own obligations as security; (4) a claim for unjust enrichment; and (5) a claim for negligent management of securities by the United States.
The District Court correctly held that it had no jurisdiction to grant any relief to plaintiffs-appellants in this case. Before the merits of the claim can be considered, there must be statutory authority evidencing the consent of the sovereign to be sued and conferring jurisdiction on the District Court to entertain this action. United States v. Shaw, 309 U.S. 495, 503, 60 S.Ct. 659, 84 L.Ed.2d 888 (1940).
Jurisdiction is asserted under 28 U.S.C. § 1346(a)(1) by characterizing this action as a claim for refund of taxes allegedly overpaid. The District Court correctly held that no jurisdiction is conferred by that statute under the facts of this case. The ultimate issue in a tax refund suit is whether the taxpayer has overpaid his taxes for the year in question. In the present case the correct amount of taxes is not at issue. The dispute centers around the non-action of a federal official in his capacity as a custodian. We agree with the District Court that this does not amount to an overpayment of taxes.
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...e.g., Murphy v. United States, 45 F.3d 520, 521, 523 (1st Cir.1995) (claim regarding seizure of real estate); Cleveland Chair Co. v. United States, 526 F.2d 497, 499 (6th Cir.1975) (action under Uniform Commercial Code); Dresser Indus., Inc. v. United States, 73 F.Supp.2d 682, 692 (N.D.Tex.......
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Wyodak Res. Dev. Corp. v. U.S.A, 09-8097
...Murphy v. United States, 45 F.3d 520, 521, 523 (1st Cir. 1995) (claim regarding seizure of real estate); Cleveland Chair Co. v. United States, 526 F.2d 497, 499 (6th Cir. 1975) (action under Uniform Commercial Code); Dresser Indus., Inc. v. United States, 73 F. Supp. 2d 682, 692 (N.D. Tex. ......
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Murphy v. U.S.
...be considered a tax refund suit. Accordingly, no jurisdiction exists under 28 U.S.C. Sec. 1346(a)(1). See Cleveland Chair Co. v. United States, 526 F.2d 497, 498-99 (6th Cir.1975) (no jurisdiction in refund suit where dispute centers on non-action of a federal official in his capacity as a ......
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E.W. Scripps Co. and Subsidiaries v. U.S.
...As an initial matter, we must consider whether the Government is correct in asserting that our decision in Cleveland Chair Co. v. United States, 526 F.2d 497 (6th Cir.1975), is controlling in this case and renders the exercise of subject matter jurisdiction by the district court improper. A......