Stevens Mfg. Co. v. United States, 42008.

• Decision Date: 05 November 1934
• Docket Number: No. 42008.,42008.
• Citation: 8 F. Supp. 720
• Parties: STEVENS MFG. CO. v. UNITED STATES.
• Court: U.S. Claims Court

8 F. Supp. 720

STEVENS MFG. CO. v. UNITED STATES.

No. 42008.

Court of Claims.

November 5, 1934.

COPYRIGHT MATERIAL OMITTED

Howe P. Cochran, of Washington, D. C., for plaintiff.

George H. Foster, of Washington, D. C., and Frank J. Wideman, Asst. Atty. Gen., for the United States.

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

GREEN, Judge.

For the years 1919, 1920, and 1921, plaintiff filed its returns and paid its taxes on a calendar-year basis. For the year 1921, the Commissioner of Internal Revenue proposed a deficiency and the plaintiff appealed to the Board of Tax Appeals on the ground that the Commissioner erroneously computed the tax by determining its income on a calendar-year basis. On the evidence presented the Board held that the taxpayer's income should be computed on a fiscal-year basis ending September 30th, and determined that there was no deficiency for the year 1921.

Thereafter the plaintiff filed claims for refund for the years 1916 to 1919, inclusive, based on the decision of the Board that the income should be computed on a fiscal-year basis. The Commissioner acquiesced in the decision of the Board, recomputed the taxes for the years 1916 to 1920, and presumably for the purpose of ascertaining whether the taxpayer had any objections thereto sent plaintiff a statement showing deficiencies and overpayments as follows:

                ==============================================================
                                               |  Deficiency  | Overassessment
                           Years               |   in tax     |
                -------------------------------|--------------|---------------
                1916 ..........................| .............|        $814.08
                1917 ..........................| .............| 
                Period Jan. 1 to Sept. 30, 1918| .............|     116,517.66
                Fiscal year ended Sept. 30,    |              |
                 1919 .........................|   $16,256.33 | 
                Fiscal year ended Sept. 30,    |              |
                 1920 .........................|    37,468.77 | 
                                               |______________|_______________
                   Total ......................|    53,725.10 |     117,331.74
                Net overassessment ............| .............|      63,606.64
                ---------------------------------------------------------------
                

Plaintiff responded that it "acquiesces in full" in the overassessments and deficiencies shown in the statement, executed and returned a waiver of right to file a petition before the Board of Tax Appeals with reference to the deficiencies, agreed to the assessment of the deficiencies, and further stated: "The case, therefore, may be closed completely for all years in question."

Shortly after the receipt of this communication from plaintiff, the Commissioner assessed deficiencies with interest as set out in the statement above and executed certificates of overassessment in accordance therewith, which overassessments were found to be overpayments. Part of the overpayments were applied in satisfaction of the deficiencies for 1919 and 1920 and refunds were made to plaintiff of the balance of the overpayments for those years and 1921 amounting to about $250,000. These refunds resulted from a determination that plaintiff's tax should have been computed on a fiscal-year basis instead of on the calendar-year basis on which the return was filed.

Later, the plaintiff filed timely claims for refund for the years 1919 and 1920 in the respective amounts of $16,256.33 and $37,468.77, which were the amounts of deficiencies assessed for the years 1919 and 1920, as shown by the statement sent plaintiff, and which were paid out of the overassessment. The ground of these claims for refund was that the amount of plaintiff's tax should have been computed on a calendar-year basis, its books not having been closed on the last day of any month other than December.

The defense set up by defendant is that the facts in the case show that plaintiff is estopped from making any claims for refund. The plaintiff contends that there can be no estoppel for the reason that it made no misrepresentations to defendant and that defendant was not misled by plaintiff's actions, also that if there was any mistake on defendant's part it was not as to the facts in the case but was one of law which would not give rise to an estoppel.

We think that plaintiff misapprehends the law which is applicable to the facts in this case. The estoppel set up is an equitable estoppel. In Mahoning Investment Co. v. United States, 3 F. Supp. 622, 630, 78 Ct. Cl. 231, certiorari denied 291 U. S. 675, 54 S. Ct. 526, 78 L. Ed. 1064, we said:

"The doctrine of equitable estoppel, or more properly as we think quasi estoppel, is gradually being extended by the modern courts to prevent a wrong being done `wherever, in good conscience and honest dealing,' a party ought not to be permitted to repudiate his previous statements and declarations," and cited the case of Rothschild v. Title Guarantee & Trust Co., 204 N. Y. 458, 97 N. E. 879, 881, 41 L. R. A. (N. S.) 740, 3 F. Supp. 622, 630, in support of the doctrine, quoting the...