Sancho v. Serralles, 3409.

• Decision Date: 02 August 1939
• Docket Number: No. 3409.,3409.
• Citation: 106 F.2d 125
• Parties: SANCHO v. SERRALLES.
• Court: U.S. Court of Appeals — First Circuit

106 F.2d 125 (1939)

SANCHO v. SERRALLES.

No. 3409.

Circuit Court of Appeals, First Circuit.

August 2, 1939.

William Cattron Rigby, of Washington, D. C. (B. Fernandez Garcia, of San Juan, P. R., and Nathan R. Margold, of Washington, D. C., on the brief), for appellant.

David A. Buckley, Jr., of Washington, D. C. (Harvey L. Rabbitt, Arthur L. Quinn, and H. Russell Bishop, all of Washington, D. C., on the brief), for appellee.

Before WILSON, Circuit Judge and PETERS and MAHONEY, District Judges.

MAHONEY, District Judge.

This is an appeal by the appellant from a judgment entered April 20, 1938, by the Supreme Court of Puerto Rico, in which was granted the petition of the appellee that a writ of mandamus issue against the Treasurer of Puerto Rico. The facts are these:

On December 31, 1919, the taxpayer, Succession J. Serralles, paid the amount of $30,407.08 in satisfaction of its income tax for the taxable year of 1917-18. The Board of Review and Equalization subsequently reduced this amount to $14,840.20, and refunded to the taxpayer an overpayment of $15,566.88. Upon a reconsideration at the request of the taxpayer by the Board of Review and Equalization, this tax was finally fixed at $10,700.96, and the taxpayer was informed by the Treasurer in writing on September 22, 1924, that the balance of $4,139.24 would be refunded when the necessary requirements of law were complied with.

The taxpayer paid under protest the sum of $31,466.04, as its income tax for the year 1918-19. This amount was paid in two instalments, one on May 19, 1920 and the other on September 15, 1920. It was subsequently determined by the Board of Review and Equalization that there was an overpayment by the taxpayer in the sum of $6,077, which the Treasurer agreed on September 22, 1924, would be refunded upon the taxpayer's compliance with the necessary requirements of law.

Also the amount of income tax for the year 1919-20 was considered by the Board of Review and Equalization, and it found there had been an overpayment of $44,118.17. On April 9, 1924 the Treasurer wrote that this amount would be refunded upon receipt by him of the necessary forms. Subsequently, credits in the amount of $7,317.90 and $22,595.08 were given to the taxpayer on income taxes for the year 1923-24, which reduced the overpayment for 1919-20 to the amount of $14,151.19. These overpayments, namely, $4,139.24 for the year 1917-18, $6,077 for the year 1918-19, and $14,151.19 for the year 1919-20 were finally determined on December 18, 1924, and were left with the Treasurer by agreement to be used by the taxpayer as a credit against future taxes as they should be assessed.

The taxpayer, on February 26, 1926, after the amount of $24,367.43 had been agreed upon as the amount due to the taxpayer, requested that the agreement be put into effect and that it be allowed a credit out of the funds on hand against a special income tax for the year 1924. But the Treasurer, at the request of the Auditor of Puerto Rico that no credits be allowed the taxpayer because it owed the amount of $82,346.34 plus interest to date of payment to cover final balance for uncollected income taxes for the years 1918-1919 and 1920, refused this request. The Treasurer under date of March 1, 1926 notified the taxpayer of its refusal by letter. The People of Puerto Rico in 1926 filed suit to recover the said amount of $82,346.34, in which suit final judgment was rendered against it in October, 1933.

On April 2, 1929, the taxpayer requested the computation and refund of its excess payments for the years 1917-18, 1918-19 and 1919-20 in accordance with the final award of the Board of Review and Equalization. This request was refused by the Treasurer on the ground that a suit was pending between the People of Puerto Rico and the taxpayer concerning income taxes for this same period and that he must await its outcome. On April 11, 1929, the taxpayer filed a petition for a writ of mandamus against the Treasurer and the Auditor for the immediate computation and refund of the overpayments. This suit was dismissed on February 2, 1932, for lack of prosecution.

The Treasurer, on April 18, 1934, sent the required forms to be filled out by the taxpayer, for the three refunds totaling $24,367.43. The taxpayer refused to fill out and file these forms because it demanded that interest be paid on the amounts.

On October 18, 1934, the Treasurer informed the appellee that from that date it had the above amounts at its disposal and that they would be refunded as soon as the forms were returned.

The taxpayer, on October 17, 1934, filed a petition in mandamus requesting that the Treasurer be ordered to credit its income tax for the year 1933 in the amount of $34,931.73 against the balance in favor of the taxpayer in the amount of $24,367.43 plus interest in the amount of $17,596.46, which represented interest at 6 percent from the date of payment to April 18, 1934. The taxpayer further demanded the...