Ralston Purina Co. v. United States

• Decision Date: 06 June 1932
• Docket Number: No. L-506.,L-506.
• Citation: Ralston Purina Co. v. United States, 58 F.2d 1065, 75 Ct.Cl. 525 (Fed. Cl. 1932)
• Parties: RALSTON PURINA CO. v. UNITED STATES.
• Court: U.S. Claims Court

58 F.2d 1065 (1932)

RALSTON PURINA CO. v.UNITED STATES.

No. L-506.

Court of Claims.

June 6, 1932.

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John E. Hughes, of Chicago, Ill. (William Cogger, of Washington, D. C., on the brief), for plaintiff.

John W. Hussey, of Washington, D. C., and Charles B. Rugg, Asst. Atty. Gen. (H. S. Fessenden, of Washington, D. C., on the brief), for the United States.

Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.

LITTLETON, Judge.

Plaintiff first contends that the deficiency for the fiscal year 1918 was not timely assessed.The return for that fiscal year, to be used in computing the statute of limitation within which the commissioner could make an assessment for such fiscal year, was the completed consolidated return filed by plaintiffJune 16, 1919, under and pursuant to the provisions of the Revenue Act of 1918, approved February 24, 1919, which was retroactive to January 1, 1918(40 Stat. 1057).Davis Feed Co., 2 B. T. A. 616;Covert Gear Co., 4 B. T. A. 1025;Fred T. Ley & Co. v. Comm., 9 B. T. A. 749;A. Cellers et al. v. Comm., 16 B. T. A. 411;National Paper Products Co., 26 B. T. A. ___, decided May 17, 1932;United States v. Updike (D. C.)1 F.(2d) 550, affirmed (C. C. A.)8 F.(2d) 913;United States v. Updike (D. C.)25 F.(2d) 746, affirmed (C. C. A.)32 F. (2d) 1;Id., 281 U. S. 489, 50 S. Ct. 367, 74 L. Ed. 984;Whitney Bodden Shipping Co. v. United States, 52 F.(2d) 1003, 72 Ct. Cl. 653;IT: 1875, II-2 C. B. 238.The additional assessment of $23,846.88, March 6, 1924, for the fiscal year 1918 was therefore timely.

The deficiency of $23,846.88 for 1918 was timely assessed.At the time the collector mailed plaintiff a notice of the deficiency and made demand for payment thereof, he had three months within which to make collection.Plaintiff was advised by the commissioner at the time the assessment was made that inasmuch as the deficiency had been assessed without giving plaintiff an opportunity to appeal, as provided in section 250 (d) of the Revenue Act of 1921(42 Stat. 266), it had the privilege of filing a claim in abatement with respect to the deficiency.No protest of the deficiency was made and no claim in abatement was filed.The plaintiff appears to have agreed to the correctness of the deficiency for 1918.In order to be relieved of the burden of having to pay the additional tax of $23,846.88 due for 1918, plaintiff communicated with the commissioner by telegram in which it asked that collection of the additional tax due for 1918 be withheld until the overpayment for 1919 was adjusted.In our opinion this telegram to the commissioner was an agreement on the part of the plaintiff that if the government would relieve it of the burden of paying the additional tax for 1918 prior to the allowance of the refund for 1919 the government might retain a sufficient amount of the 1919 overpayment to satisfy the deficiency for 1918.In consideration thereof the commissioner advised the collector to take no steps to collect the deficiency until receipt of the schedule of overassessment for 1919.But for the plaintiff's telegram to the commissioner the additional tax for the fiscal year 1918 would have been collected or a distraint proceeding for the collection thereof would have been begun prior to the expiration of the limitation period of five years after the return for 1918 was filed on June 16, 1919.When the overpayment of $68,724.90 for the fiscal year 1918 was determined on November 3, 1924, and formally allowed on March 3, 1925, the government retained $23,846.88 thereof, as the plaintiff had requested and agreed should be done, and the balance of $44,878.02 was duly refunded to plaintiff, together with interest of $17,051.26.Plaintiff was duly notified of the action taken.It made no objection thereto and for more than five years thereafter acquiesced in the action which had been taken.In these circumstances it is our opinion that plaintiff is estopped to assert that the government had no right to retain that portion of the 1919 overpayment equal to the additional tax due for 1918.In Dickerson v. Colgrove, 100 U. S. 578, 580, 25 L. Ed. 618, the court said: "The estoppel here relied upon is known as an equitable estoppel, or estoppel in pais.The law upon the subject is well settled.The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted.Such a change of position is sternly forbidden.* * * There is no rule more necessary to enforce good faith than that which compels a person to abstain from asserting claims which he has induced others to suppose he would not rely on.The rule does not rest on the assumption that he...