United States v. Emery, Bird Thayer Realty Company

• Decision Date: 05 April 1915
• Docket Number: No. 117,117
• Citation: 35 S.Ct. 499,237 U.S. 28,59 L.Ed. 825
• Parties: UNITED STATES, Plff. in Err., v. EMERY, BIRD, THAYER REALTY COMPANY
• Court: U.S. Supreme Court

237 U.S. 28

35 S.Ct. 499

59 L.Ed. 825

UNITED STATES, Plff. in Err.,

v EMERY, BIRD, THAYER REALTY COMPANY.

No. 117.

Argued January 12 and 13, 1915.

Decided April 5, 1915.

Solicitor General Davis and Mr. Karl W. Kirchwey for plaintiff in error.

Messrs. Albert R. Strother and James G. Smart for defendant in error.

[Argument of Counsel from page 29 intentionally omitted] Mr. Everett P. Wheeler as amicus curice.

Mr. Justice Holmes delivered the opinion of the court:

This is a suit under the judicial code of March 3, 1911, chap. 231, § 24, ¶20, 36 Stat. at L. 1087, Comp. Stat. 1913, § 968, formerly the Tucker act of March 3, 1887, chap. 359, §§ 1, 2, 24 Stat. at L. 505, to recover the amount of taxes paid under protest. It presents two questions: Whether the district court, sitting as a court of claims, had jurisdiction of this case; and whether the claimant, the defendant in error, was 'engaged in business' or 'doing business' within the meaning of the corporation tax law of August 5, 1909, chap. 6, § 38, 36 Stat. at L. 11, 112, Comp. Stat. 1913, § 6300. The district court asserted its jurisdiction and gave judgment for the claimant. 198 Fed. 242.

The facts do not need lengthy statement. The Emery, Bird, Thayer Dry Goods Company, a business corporation of Kansas City, Missouri, occupied certain lands partly hired and partly owned by it, for the purposes of its business. Eighteen months before the passage of the corporation tax law its members decided that the claimant should be organized, and it was, for the purpose of acquiring the Dry Goods Company's lands and of letting the same to the Dry Goods Company, the latter having the management of the property and assuming the responsibilities in respect of it. The only business done by the claimant was to keep up its corporate organization and to collect and distribute the rent received from its single lessee; and the court found as a fact that it was not doing business within the statute, subject, of course, to the question whether the activities stated constituted such doing business as matter of law. The chartered powers of the claimant included performing and enforcing the performance of the respective covenants in the leases taken over and the sale of the property or any part of it upon the vote of not less than two thirds of the stockholders, who were very nearly the same as those of the Dry Goods Company. It also covenanted to rebuild in case the buildings were destroyed. But there has been no occasion to perform any of these undertakings. The taxes in question were paid under duress and protest, and were turned over by the collector to the United States, which still retains them. A claim to have the taxes refunded was submitted in due form to the collector of internal revenue, but repayment was denied.

The objection to the jurisdiction pressed by the government is that the only remedy is a suit against the collector. As the United States has received and keeps the money, and would indemnify the collector if he had to pay (Rev. Stat. § 3220, Comp. Stat. 1913, § 5944, the least that can be said is that it would be adding a fifth wheel to the coach to require a circuitous process to satisfy just claims. It is true that this tax law provides that 'all laws relating to the collection, remission, and refund of internal revenue taxes, so far as applicable,' etc., are extended to this tax (§ 38, 36 Stat. at L. 117, chap. 6), but that is far from the case of a statute creating a new right and a special remedy to enforce it in such form as to make that remedy exclusive. The right to sue the collector for an unjustified collection was given by the common law. The jurisdiction over suits against the United States under § 24 of the Judicial Code extends to 'all claims not exceeding ten thousand dollars founded upon the Constitution of the United States or any law of Congress.' However gradually the result may have been approached in the earlier cases, it now has become accepted law that claims like the present are 'founded upon' the revenue law. The argument...