United States v. Magnolia Petroleum Co, 283

• Citation: 276 U.S. 160,72 L.Ed. 509,48 S.Ct. 236
• Decision Date: 20 February 1928
• Docket Number: No. 283,283
• Parties: UNITED STATES v. MAGNOLIA PETROLEUM CO. et al
• Court: United States Supreme Court

276 U.S. 160

48 S.Ct. 236

72 L.Ed. 509

UNITED STATES

v MAGNOLIA PETROLEUM CO. et al.

No. 283.

Argued Jan. 4, 1928.

Decided Feb. 20, 1928.

The Attorney General and Mr. Herman J. Galloway, Asst. Atty. Gen., for the United States.

Mr. Barry Mohun, of Washington, D. C., for respondents.

Mr. Justice BUTLER delivered the opinion of the Court.

Respondent was assessed and paid for 1916 an income tax of $105,571.95 and for 1917 income and excess profits taxes of $1,131,075.86 in excess of the amounts for which it was liable. October 11, 1923, the Commissioner of Internal Revenue so determined, and, November 22, 1923, the respondent received certificates showing such over assessments and treasury warrants for the return of these amounts. Each certificate included a statement that 'interest status will be determined as soon as necessary data can be assembled.'

Section 1324(a) of the Revenue Act of 1921, which was then in force, authorized interest from the date of the payment of the taxes if paid under protest; but, if not paid under protest or pursuant to an additional assessment, it allowed interest to commence six months after the filing of claim for refund. Section 1019 of the Revenue Act of 1924, provided that interest on refunds should be computed from the date the taxes were paid.¹

January 18, 1924, the Commissioner notified respondent that the interest payable on the refunds had been determined. July 2, 1924, after the passage of the Revenue Act of that year, the Commissioner wrote respondent that the amounts stated in his letter of January 18, 1924-corrected by reason of an error as to the date of filing the claim for refund of 1917 taxes-would be paid, and on July 18, 1924, issued a treasury warrant to respondent for $35,369.05, being $19,171.21 on the refund of 1916 taxes and $16,197.84 on the refund of 1917 taxes. Respondent, saving its right to sue for additional interest, accepted payment of the amount specified, and later brought this suit. The Court of Claims held that the act of 1924 applied, calculated interest from dates of payment of the taxes, and gave judgment for $365,799.42. This court granted a writ of certiorari. 275 U. S. 512, 48 S. Ct. 28, 72 L. Ed. —.

The petitioner maintains that the interest should be computed according to section 1324(a) of the act of 1921. Respondent contends that by section 1019 of the act of 1924 and contemporaneous repeal of section 1324(a), the basis of interest allowances was changed and that, as the interest had not yet been paid, respondent became entitled to an amount calculated according to the later enactment. Undoubtedly it was within the power of Congress to apply that basis to claims like those of respondent. But the question is whether the statute should be so construed. The date of 'allowance' was October 11, 1923, when the Commissioner approved the refunds. Girard Trust Co. v. United States, 270 U. S. 163, 169, 46 S. Ct. 229, 70 L. Ed. 524. Under section 1324(a), 'upon the allowance' of the refunds, respondent became entitled to interest according to the rule then in force. Cf. Blair v. Birkenstock, 271 U. S. 348, 350, 46 S. Ct. 506, 70 L. Ed. 983. Computation and payment were all that remained to be done. There is nothing to suggest that section 1019 was intended to change the rule as to refunds theretofore allowed. The language employed shows the contrary. The words are 'upon the allowance of * * * refund * * * interest shall be allowed * * * from the date such tax was paid.' Statutes are not to be given retroactive effect or construed to change the status of claims fixed in accordance with earlier pro- visions unless the legislative purpose so to do plainly appears. United States v. Heth, 3 Cranch, 399, 413, 2 L. Ed. 479; White v. United States, 191 U. S. 545, 552, 24 S. Ct. 171, 48 L. Ed. 295; Shwab v. Doyle, 258 U. S. 529, 534, 42 S. Ct. 391, 66 L. Ed. 747, 26 A. L. R. 1454. Respondent calls attention to section 1100 of the act of 1924 (Comp. St. § 6371 5/6 t), repealing the act of 1921 and says that the saving clause therein does not extend to interest on refunds allowed under section 1324(a). But, save as given by Congress, respondent had no right to interest; as shown above, the basis prescribed by the later act was not substituted for that fixed by the earlier one; and, as respondent's right to have the rule prescribed by the act of 1921 applied is not questioned, we need not consider the effect of the repealing and saving clauses. It is clear that respondent is not entitled to allowances on the basis of the act of 1924, and that the judgment must be reversed.

Respondent, assuming that the act of 1921 applies, insists that the facts found by the lower court show that the Commissioner's allowances of interest were erroneous and that it is entitled to much more than it has received.

It appears from calculations made in its brief that if the basis contended for by the respondent be applied to the refund of the 1916 tax, respondent has been allowed and paid.$864.99 in excess of what it was entitled to have. As petitioner is not complaining of that, we need not consider the matter.

As to the 1917 taxes, respondent filed returns May 18, 1918, but paid no tax thereon....