United States v. Richards

• Decision Date: 13 June 1928
• Docket Number: No. 7977.,7977.
• Citation: 27 F.2d 284
• Parties: UNITED STATES v. RICHARDS.
• Court: U.S. Court of Appeals — Eighth Circuit

27 F.2d 284 (1928)

UNITED STATES v. RICHARDS.

No. 7977.

Circuit Court of Appeals, Eighth Circuit.

June 13, 1928.

A. J. Ward, Sp. Atty. Bureau of Internal Revenue, of Washington, D. C. (C. M. Charest, Gen. Counsel Bureau of Internal Revenue, of Washington, D. C., and John M. Goldesberry, U. S. Atty., of Tulsa, Okl., on the brief), for the United States.

Ralph A. Smith, of Kansas City, Mo., for defendant in error.

Before LEWIS, Circuit Judge, and SCOTT and DAVIS, District Judges.

LEWIS, Circuit Judge.

This action was brought by Richards, a member of the Choctaw Tribe of Indians and of one-sixteenth Indian blood, to recover Federal income taxes alleged to have been assessed and collected from him erroneously and illegally on royalties paid to him on oil produced from lands allotted to him, and which under the acts of June 28, 1898, and July 1, 1902 (30 Stat. 495, 507; 32 Stat. 641, 642), were exempt from taxation at the time the assessments were made. His complaint disclosed that he did not present to the Commissioner of Internal Revenue within four years after payments his claims for refund, as required by Rev. Stat. §§ 3226 and 3228, and amendments thereto (26 USCA §§ 156, 157). See 42 Stat. 314, 315; 43 Stat. 342, 343; 44 Stat. 115, 116. Because of this neglect defendant below demurred and contended the action is not maintainable, which was overruled. Without further pleading judgment went for plaintiff for the amounts paid on the assessments for 1917, 1918 and 1919, all made more than four years prior to July 20, 1925, the date Richards presented his claims to the Commissioner of Internal Revenue for refunds. The issue on the demurrer is brought here on the assignment that the court erred in overruling it and in entering judgment on the complaint for plaintiff.

Counsel for plaintiff in error concedes that the taxes were erroneously and illegally assessed; that the allotted lands and the oil produced from them were exempt from taxation, though all other restrictions thereon had been removed by the Act of May 27, 1908. 35 Stat. 312. But the terms of section 3226 leave no basis to argue that the right to maintain the action is not dependent on the precedent condition of a compliance with section 3228; that is, plaintiff must plead and prove that he presented to the Commissioner a claim for refund of the tax within four years after payment. De Bary v. Dunne (C. C.) 162 F. 961; R. I. A. & L. R. R. v. United States, 254 U. S. 141, 41 S. Ct. 55, 65 L. Ed. 188. The sections, so far as material here, read thus:

(3226) "No suit or proceeding shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously or illegally assessed or collected * * * until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard. * * *"

(3228) "All claims for the refunding or crediting of any internal-revenue tax alleged to have been erroneously or illegally assessed or collected * * * must * * * be presented to the Commissioner of Internal Revenue within four years next after the payment of such tax. * * *"

These sections have been kept in force in their essential requirements for more than half a century. In Snyder v. Marks, 109 U. S. 189, 3 S. Ct. 157, 27 L. Ed. 901, it was said of them:

"The remedy so given is exclusive, and no other remedy can be substituted for it. Such has been the current of decisions in the Circuit Courts of the United States, and we are satisfied it is a correct view of the law. Citations. In Cheatham v. United States, 92 U. S. 85, 88 23 L. Ed. 561, and again in State Railroad Tax Cases, 92 U. S. 575, 613 23 L. Ed. 663, it was said by this court, that the system prescribed by the United States in regard to both customs duties and internal revenue taxes, of stringent measures, not judicial, to collect them, with appeals to specified tribunals, and suits to recover back moneys illegally exacted was a system of corrective justice intended to be complete, and enacted under the right belonging to the Government to prescribe the conditions on which it would subject itself to the judgment of the courts in the collection of its revenues."

See, also, Dodge v. Osborn, 240 U. S. 118, 36 S. Ct. 275, 60 L. Ed. 557.

Counsel for Richards...