United States v. BERTELSEN & PETERSEN E. CO.

• Decision Date: 18 March 1938
• Docket Number: No. 3243.,3243.
• Citation: 95 F.2d 867
• Parties: UNITED STATES v. BERTELSEN & PETERSEN ENGINEERING CO.
• Court: U.S. Court of Appeals — First Circuit

95 F.2d 867 (1938)

UNITED STATES v. BERTELSEN & PETERSEN ENGINEERING CO.

No. 3243.

Circuit Court of Appeals, First Circuit.

March 18, 1938.

Loring W. Post, Sp. Asst. to Atty. Gen. (James W. Morris, Asst. Atty. Gen., and Sewall Key, Norman D. Kelley, and F. A. Michels, Sp. Assts. to Atty. Gen., on the brief) for the United States.

O. Walker Taylor and Ray Henry, both of Boston, Mass., for appellee.

Before BINGHAM, WILSON, and MORTON, Circuit Judges.

WILSON, Circuit Judge.

This is an action by a taxpayer to recover the sum of $34,555.68 with interest as a part of an overpayment of $91,570.34 for income and excess profits taxes for the year 1917, which overpayment had been allowed by the Commissioner.

On July 27, 1926, the Commissioner assessed a deficiency tax against the plaintiff of $34,555.68 for the year 1918, and under section 284 of the Revenue Act of 1926, 44 Stat. 66, credited against such deficiency assessment the above amount, being a part of the overpayment already allowed for the 1917 taxes. The plaintiff contends that the deficiency assessment made on July 27, 1926, was unauthorized and unlawful, and that it is entitled to recover the above sum, being a balance of the overpayment of the 1917 taxes, which had been allowed by the Commissioner. The case was heard by the District Court.

While this case had previously been before this court on appeal and was remanded to the District Court for further proceedings in accordance with the opinion of this court, 60 F.2d 745, the question of the jurisdiction of the District Court is raised by the government for the first time in this court under its present assignment of errors.

We think there is no merit in the government's contention. Its contention is based on section 24(5), and (20), as amended, of the Judicial Code, 28 U.S.C.A. § 41(5, 20). Subsection (20) of section 24 provides that District Courts have concurrent jurisdiction with the Court of Claims of all claims against the United States, where the amount in controversy is not in excess of $10,000; and also of any suit or proceeding commenced after the passage of the Revenue Act of 1921, 42 Stat. 227, for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected, or any sum alleged to have been excessive or in any manner wrongfully collected under the internal revenue laws in excess of $10,000, if the collector of internal revenue by whom such tax or sum was collected is dead, or was not in office as collector of internal revenue at the time such suit or proceeding was commenced. United States v. Piedmont Mfg. Co., 4 Cir., 89 F.2d 296, 300; United States v. Reeves Bros. Co., 6 Cir., 83 F.2d 121, 122.

It is admitted that the collector who collected the 1917 tax was, at the time of the filing of this petition in 1929, either dead or out of office. The government contends that this action is governed by section 3226, Rev.St., 26 U.S.C.A. §§ 1672-1673 note, but we think in the last analysis it is based on a claim for a balance of the overpayment for the 1917 tax and not for an illegal collection of a 1918 tax. The District Court so held. The government's contention on this point is without merit. United States v. Piedmont Mfg. Co., supra, 89 F.2d 296, at page 300.

The other assignments of error by the government raise the question of whether a "fifth waiver" filed with the Bureau in December, 1925, was effective to extend the time for assessing the 1918 tax to December 31, 1926; and whether the judgment is supported by the findings of fact by the District Court.

The District Court in its opinion under a heading, "Findings of Fact," found that four waivers previous to that of December, 1925, had been filed with the Bureau, which extended the time for assessing the taxes for 1918 to February 27, 1926. Whether or not these findings can be considered special findings within the meaning of section 700, Rev.St., 28 U.S.C.A. § 875, no exception was taken thereto and no question of law is raised before this court as to the sufficiency of the evidence to support them.

Therefore, to sustain the validity of the deficiency tax which was assessed on July 27, 1926, the waiver filed in December, 1925, must be held to be a valid waiver. Section 278(c) of the Revenue Act of 1924, 43 Stat. 300, requires that both the taxpayer and the Commissioner consent in writing to any assessment of a tax after the period prescribed in section 277 of the 1924 act, 43 Stat. 299.

It is agreed that the fifth waiver filed in December, 1925, was not signed by the Commissioner. While there is some difference in the decided cases as to whether the signature of the Commissioner is essential to the validity of a waiver, it has been so held in the case of Commissioner v. United States Ref. Corp., 3 Cir., 64 F. 2d 69, which was affirmed by an equally divided court in Helvering v. U. S. Ref. Corp., 290 U.S. 591, 54 S.Ct. 94, 78 L.Ed. 521; and again in the case of S. S. Pierce Company v. United States, 1 Cir., 93 F.2d 599, it was decided by this court on December 8, 1937, that the signature of the Commissioner, in some form, assenting to a waiver by a taxpayer was essential to its validity.

In R. H. Stearns Co. v. United States, 291 U.S. 54, 54 S.Ct. 325, 78 L.Ed. 647, while it was recognized that the assent of the Commissioner must be indicated in writing in some manner, it was held that his assent might be inferred from a notation on the official schedule of assessments signed by the Commissioner on...