Daube v. United States
| Decision Date | 14 November 1932 |
| Docket Number | No. L-106.,L-106. |
| Citation | 1 F. Supp. 771 |
| Parties | DAUBE v. UNITED STATES. |
| Court | U.S. Claims Court |
John E. Hughes, of Chicago, Ill. (William Cogger, of Washington, D. C., on the brief), for plaintiff.
G. Aaron Youngquist and Charles B. Rugg, Asst. Attys. Gen. (Lisle A. Smith and E. E. Angevine, both of Washington, D. C., on the brief), for the United States.
Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
The motion for new trial is based upon the statement that the court erred in stating in the opinion that, although the application of the overpayment was made after the statute of limitations had run, the statute then in force did not extinguish the debt due from the taxpayer, it merely abrogated the remedy. It is urged on behalf of plaintiff that Bowers v. New York & Albany Lighterage Co., 273 U. S. 346, 47 S. Ct. 389, 390, 71 L. Ed. 676, held to the contrary. This is a mistake. The question for decision in that case, as expressly stated in the opinion, was whether section 250 (d) of the Revenue Act of 1921 (42 Stat. 264) barred collection by distraint proceedings begun after the expiration of the five-year period of limitation, and it was held that the word "proceeding" as used in this limitation clause "cannot be restricted to steps taken in a suit; it includes as well steps taken for the collection of taxes by distraint." The reversal by the Supreme Court in 273 U. S. 781, 47 S. Ct. 471, 71 L. Ed. 889, of the Toxaway Mills Case, 61 Ct. Cl. 363, a case which involved the construction of the same statute, did not amount to a decision that the statute barring the remedy extinguished the tax debt. In the Toxaway Mills Case, the record showed that the tax was paid by reason of a demand made by the government after the period of limitations had expired, and the only inference that can properly be made from the reversal is that the Supreme Court considered that a demand made by government officials was a "proceeding" which was barred by the statute; the court having held in the Bowers Case, supra, that the word "proceeding" was "used broadly in reference to steps for the collection of taxes," and that its meaning was not limited to collection by suit.
The basic principle of these cases, as we understand it, is that, where the government, after the period of limitations has run, collects taxes by a proceeding forbidden by law, a suit can be maintained to recover back the money so paid. Obviously, if this were not the case, the statutes so violated would be practically nullified in tax cases, as the taxpayer cannot enjoin proceedings to collect the tax, but is compelled to bring suit to recover the money illegally taken from him. But no such situation is presented by the case at bar, and, as we think, there was no statute in force during the period involved which could possibly be construed as extinguishing the debt when the period of limitations had run.
The argument made on behalf of plaintiff assumes that the case at bar is one in which the government, after action to collect the tax was barred, initiated some kind of proceedings to obtain its payment. On the contrary, the plaintiff initiated proceedings to have money which belonged to him and was held by defendant applied on the tax debt. The direction to make the application was made before the expiration of the statute of limitations. It is true that the period of limitation as to a part of plaintiff's taxes had expired when the application was made, but that does not alter the situation. The direction to apply the overpayments on the tax still unpaid had not been withdrawn. In the case of Stange v. United States, 282 U. S. 270, 51 S. Ct. 145, 75 L. Ed. 335, the Supreme Court, in affirming the decision of this court (68 Ct. Cl. 395), held that a waiver filed after the period of limitations had expired was not ineffective, and that, by reason of the waiver, money paid on a tax which was barred by the statute of limitations, could be...
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