United States v. Erb

• Decision Date: 30 July 1934
• Citation: 8 F. Supp. 947
• Parties: UNITED STATES v. ERB et al.
• Court: U.S. District Court — Southern District of New York

8 F. Supp. 947

UNITED STATES v. ERB et al.

District Court, S. D. New York.

July 30, 1934.

Martin Conboy, U. S. Atty., of New York City (Leon E. Spencer, Asst. U. S. Atty., of New York City, of counsel), for the United States.

Blake & Voorhees, of New York City (Edward I. Devlin, Jr., of New York City, of counsel), for defendants.

COXE, District Judge.

This is a motion by the plaintiff for judgment on the pleadings, and also for summary judgment under the state court practice.

The action is to recover $150,000, with interest, on an abatement bond, given to the collector of internal revenue by Elmer E. Smathers, on May 18, 1925, conditioned that "if the said claim in abatement shall be denied in whole or in part * * * and upon notice and demand * * * the said E. E. Smathers pays * * * the said tax, or such amount thereof as may be found due, together with such penalties and interest as may accrue thereon, then this obligation to be null and void. * * *"

Prior to the execution of this bond, Smathers had been assessed for $139,750.66 for additional income and profits taxes for 1918, and demand for payment had been made by the collector; and the purpose of the bond was to stay collection of the taxes pending a determination of the claim by the Commissioner. This did not take place until February 5, 1927, when the Commissioner allowed the claim to the extent of $10,958.27, but rejected it for the balance of $128,972.39. Thereafter notice and demand for payment were given to Smathers, but payment was refused. Subsequently, on January 11, 1928, Smathers died, and the defendants are the executors of his estate. The present suit was commenced February 2, 1933.

These facts are conceded, and clearly entitle the plaintiff to judgment, U. S. v. John Barth, 279 U. S. 370, 49 S. Ct. 366, 73 L. Ed. 743; Gulf States Steel Co. v. U. S., 287 U. S. 32, 53 S. Ct. 69, 77 L. Ed. 150; U. S. v. Root (C. C. A.) 62 F.(2d) 385; Cert. denied, 289 U. S. 733, 53 S. Ct. 593, 77 L. Ed. 1481, unless the separate defenses set up in the answer raise issues to be tried.

There are four of these defenses, namely (1) that the present action was not commenced within three months after the rejection of the claim by the defendants, as required by section 211 of the New York Surrogate's Court Act; (2) that the tax itself is erroneous, and nothing is due; (3) that there is another action pending between the same parties for the recovery of the amount of the tax; and (4) that there has...