Harris v. United States

• Decision Date: 30 April 1931
• Docket Number: No. 1047.,1047.
• Citation: 51 F.2d 382
• Parties: HARRIS v. UNITED STATES.
• Court: U.S. District Court — Panama Canal Zone

51 F.2d 382 (1931)

HARRIS v. UNITED STATES.

No. 1047.

District Court, S. D. Texas, Galveston Division.

April 30, 1931.

John D. Watkins, of Galveston, Tex., for plaintiff.

Henry M. Holden, U. S. Atty., of Houston, Tex.

KENNERLY, District Judge.

Articles 5013 to 5023, inclusive, of the Texas Revised Statutes of 1925, authorize individuals, partnerships, or associations of individuals, to make any insurance (except life insurance) on the "Lloyd's plan," by executing articles of agreement, expressing their purpose so to do, and complying with the provisions of said articles. On April 15, 1927, Maco Stewart, of Galveston, Tex., and eleven other individuals executed a power of attorney, claimed to be such as is provided for in such articles, to Fletcher W. Harris, of Galveston, Tex. In such power of attorney, it is set forth that the business is to be carried on under the name of "Lloyd's Agency at Galveston." Fletcher W. Harris then filed with the insurance commissioner of the state of Texas an application for a permit for Lloyd's Agency at Galveston to write insurance in accordance with the provisions of said statute, for the year ending February 28, 1928. Such permit for such period was issued by such commissioner. A similar application was filed and a similar permit was issued for the year ending February 28, 1929. Under instructions from the internal revenue authorities, and under protest, said Harris, acting under the name of "Lloyd's Agency at Galveston," filed for such agency an income tax return for the calendar year 1928, and likewise, under protest, on or prior to March 15, 1929, paid to the proper tax authorities $38, being the assessment of tax owing under such return. This is a suit by said Fletcher W. Harris, as attorney in fact for Lloyd's Agency at Galveston, by original petition filed November 19, 1930, and amended petition filed December 9, 1930, against the United States of America, under the provisions of subdivision 20 of section 41 of Title 28 of the United States Code (28 USCA § 41 (20), to recover such tax so paid. Defendant's answer, filed February 16, 1931, interposes general demurrer, special demurrer, and general denial. Such demurrers were heard along with the case on the merits, without same being waived by defendant. On account of the disposition that is made of the case on the merits, it is only necessary to notice the special demurrer, which, for convenience, is quoted: "Defendant specially demurs and excepts to plaintiff's first amended original petition and says the same is insufficient in law and does not set forth a cause of action, in that said action is instituted by Fletcher W. Harris, Attorney-in-Fact, Lloyd's Agency at Galveston, when in truth and in fact said petition, on its face, shows that the party at interest is the Lloyd's Agency at Galveston."

It is clear that this is not a suit by Fletcher W. Harris individually, and that he does not purport to act herein individually. An examination of the amended petition, together with its exhibits, makes it clear that this is a suit by Lloyd's Agency at Galveston, which it is claimed was created by the execution of the power of attorney hereinbefore referred to, and by the happening of the matters, and the doing of the things, set forth in said amended petition; all purporting to be done under and by virtue of said articles 5013 to 5023, inclusive, of the Texas Revised Civil Statutes. The special demurrer of defendant, therefore, should be, and will be, overruled.

This brings us to the question of the liability of said Lloyd's Agency at Galveston to file the income tax return which was filed, and to pay the tax which was paid, and its right to recover same herein. The determination of these questions largely depends upon the character of organization created by plaintiff under said articles of the Texas statutes, and in determining that question what is said by the Circuit Court of Appeals for the Fifth Circuit in the recent case of Lucas, ...