United States v. Los Angeles Soap Co., 11032.
| Decision Date | 01 March 1946 |
| Docket Number | No. 11032.,11032. |
| Citation | 153 F.2d 320 |
| Parties | UNITED STATES v. LOS ANGELES SOAP CO. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Samuel O. Clark, Jr., Asst. Atty. Gen., Sewall Key, Helen R. Carloss, Rigmor O. Carlsen and Harold C. Wilkenfeld, Sp. Assts. to Atty. Gen., and Charles H. Carr, U. S. Atty., and E. H. Mitchell, Asst. U. S. Atty., both of Los Angeles, for appellant.
Isadore B. Dockweiler, Thomas A. J. Dockweiler, and Frank Mergenthaler, all of Los Angeles, Cal., for appellee.
Before GARRECHT, MATHEWS, and HEALY, Circuit Judges.
Section 602½ of the Revenue Act of 1934, 26 U.S.C.A. Int.Rev.Acts, page 778, provided:
"(a) There is hereby imposed upon the first domestic processing of coconut oil * * * a tax of 3 cents per pound, to be paid by the processor. There is hereby imposed (in addition to the tax imposed by the preceding sentence) a tax of 2 cents per pound, to be paid by the processor, upon the first domestic processing of coconut oil * * * except that the tax imposed by this sentence shall not apply when it is established, in accordance with regulations prescribed by the Commissioner with the approval of the Secretary, that such coconut oil * * * is wholly the production of the Philippine Islands or any other possession of the United States * * *. All taxes collected under this section with respect to coconut oil wholly of Philippine production * * * shall be held as a separate fund and paid to the Treasury of the Philippine Islands * * *1 2
Los Angeles Soap Company, hereafter called taxpayer, was at all pertinent times a processor of coconut oil which was wholly the production of the Philippine Islands. Taxpayer's processing of such oil was the first domestic processing thereof. Taxpayer was therefore required to pay, with respect to such oil, the tax imposed by the first sentence of § 602½. For each of the 16 calendar months commencing with December, 1935, and ending with March, 1937, taxpayer filed with the collector of internal revenue for the Sixth Collection District of California — the district in which its principal place of business was located — a return showing the tax payable by taxpayer for that month. These taxes and the due dates thereof were as follows:
Month Tax Due date
December, 1935 $28,618.48 January 31, 1936
January, 1936 39,408.08 February 29, 1936
February, 1936 39,194.93 March 31, 1936
March, 1936 42,038.25 April 30, 1936
April, 1936 47,494.49 May 31, 1936
May, 1936 35,218.47 June 30, 1936
June, 1936 44,585.53 July 31, 1936
July, 1936 48,802.30 August 31, 1936
August, 1936 49,328.48 September 30, 1936
September, 1936 51,958.08 October 31, 1936
October, 1936 44,855.83 November 30, 1936
November, 1936 36,802.31 December 31, 1936
December, 1936 33,603.91 January 31, 1937
January, 1937 22,076.16 February 28, 1937
February, 1937 32,355.12 March 31, 1937
March, 1937 52,534.12 April 30, 1937
None of these taxes was paid when due. On February 11, 1936 — 11 days after the December, 1935, tax ($28,618.48) became due and payable — taxpayer brought a suit in the District Court of the United States for the Southern District of California to enjoin and restrain the collector from collecting any tax then or thereafter payable by taxpayer under § 602½, on the ground that this section was unconstitutional. Thereupon, on February 11, 1936, the court issued a temporary restraining order restraining such collection, with the proviso that taxpayer should continue to file monthly returns and should "give security in the amount of * * * $28,618.48, said security to be in the form of a cashier's check of the Farmers and Merchants National Bank of Los Angeles, in said amount, said check to be made payable to the order of R. S. Zimmerman, clerk of the United States District Court, Southern District of California, said check to be deposited in the registry of the court by the said clerk pending the further order of this court, and * * * deposit monthly amounts, hereafter, as may be disclosed by the said monthly returns."
The collector moved to dismiss the suit. The motion was granted, and a decree dismissing the suit was entered.3 Taxpayer petitioned for an order allowing an appeal from that decree and, pending such appeal, enjoining the collector from collecting any tax payable by taxpayer under § 602½. Such an order was granted on April 14, 1936, with the proviso that, pending its appeal, taxpayer should continue to file monthly returns and should "deposit in the registry of the District Court on or before the last day of each month the amount of tax disclosed by such monthly returns."
On May 3, 1937, while taxpayer's appeal was pending here, the Supreme Court held that § 602½ was constitutional.4 In view of that holding, it was stipulated that taxpayer's appeal should be dismissed. It was dismissed on May 25, 1937.5 Meanwhile taxpayer had deposited with the clerk of the District Court the amounts specified in the orders of February 11, 1936, and April 14, 1936 — amounts equal to the taxes (exclusive of interest) payable by taxpayer for the 16 months mentioned above.6 These amounts aggregated $648,874.54.
On June 8, 1937, the District Court ordered its clerk to deliver the $648,874.54 to the collector, to be applied against any tax then due from taxpayer under § 602½. The order was complied with. Thus, on June 8,...
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