151 F. 846 | U.S. Circuit Court for the District of Western Missouri | 1907
This case is pending on a demurrer of the defendant to plaintiffs’ amended petition.
The amended petition recites that September 27, 1901, Kirkland B.
“United States Internal Revenue.
“Legacies and Distributive Shares.
“Sections 29 and 30, Act of .Tune 1.3, 1808, as Amended by Sections 10 and 11 of an Act Approved March 2, 1901.
“Schedule of legacies or distributive shares arising from personal property of any kind whatsoever, being in charge or trust of Charles AY. Armour and Annie H. Armour, as executor and executrix, said property passing from Kirkland B. Armour of the city of Kansas City, county of Jackson, and state, of Missouri, who deceased upon the 27th day o:c September, 1001. to the persons hereinafter mentioned, by will or by the'intestate laws of Missouri; also the amount of such property, together with the amount of duty or tax which has accrued or should accrue thereon agreeably to the provisions of the internal revenue laws of the United State's:
Appraised value of personal estate...................... S 3,880,119 53
Total amount legal debts and expenses to which the personal property is liable.............................. 200.005 97
Balance, clear value of personal estate............ $ 3.080.113 50
November 18, 1903, said' executor and executrix in writing, under oath, and upon a form prepared by the Internal Revenue Commissioner for such cases, appealed to said Commissioner, and made application to him to have said sum of $51,751.59 so paid refunded, stating in detail and' in form satisfactory to the Commissioner the claim of illegality, .but the said appeal was by the said Commissioner denied, and he,
The defendant has demurred thereto, on the grounds: (1) There is a misjoinder of parties plaintiff. (2) Several causes of action have been improperly united. (3) Facts sufficient to constitute a cause of action are not stated. (4) There is no cause of action stated against the defendant, Charles W. Roberts, collector.
First, as to the objection of misjoinder of parties plaintiff, and of causes of action. If allowable, and if this case were by a bill in equity, the objection of multifariousness would not avail defendant. The pivotal question in the case is, as to whether the action can be maintained against the defendant to recover back the moneys thus paid. That question is common to all the plaintiffs, and no additional expense would be incurred by the defendant whether the action was brought by one or all the plaintiffs, and the evidence would be the same. But this is an action at law, and defendant contends that there is a misjoinder. The purpose in adopting a code of practice was to, in large part, make the principles of equity practice controlling in actions at law. The technicalities of the common law could be learned, hut too often by no two men concerned in a case, at the bar or on the bench, alike. Needless expense, parties wrongly thrown out of court, multiplicity of suits, and delays were supposedly made matters of history when the Codes were enacted. So that if the parties have a common interest, although differing in value, they can all join. And if one refuses to join he can be made a defendant, and one adjudication puts all the questions at rest. And the objection so often stated, that complications will arise in taking a verdict of a jury, is an objection of no force. Under most of the Codes the court upon request must take special findings, and in this court special findings may be taken. The trouble is wholly imaginary. That the former equitable principles are brought forward into the Codes, one need but read both the text and cases cited in Bliss on Code Pleading, §§ 25, 72—76. State v. Thornton, 56 Mo. 325; Walker v. Deaver, 79 Mo. 664; Insurance Co. v. Gilman, 112 Ind. 7, 13 N. E. 118; Winne v. Insurance Co., 91 N. Y. 185; Trompen v. Yates, 92 N. W. 647, 66 Neb. 525; Schiffer v. Eau Claire, 51 Wis. 385, 8 N. W. 253; Lyon v. Bertram, 20 How. 149, 15 L. Ed. 847; Phinny v. Warren, 52 Iowa, 332, 1 N. W. 522, 3 N. W. 157, under a Code like that in Missouri. I need not multiply cases. They are numerous, and particularly so in the Missouri Reports, construing the Missouri Code as to joinder of parties and actions. And this could not be otherwise, as will be seen from reading sections 544 and 542, Rev. St. Mo.
Oftentimes it is difficult to determine whether a case is in contract or sounds in tort. The question under our “fact pleading” seldom arises, except as to the measure of damages, or the statute of limitations. But in actions against the United States it is jurisdictional. In the case at bar, it is not claimed that there was an express contract, and the defendant claims tire acts of the collector were a tort. The United States attorney and his assistant, in argument at the bar, conceded that the government now has the large sum of money morally, and perhaps legally, belonging to plaintiffs, and, while not saying in language, the -answer to the plaintiffs was, in effect and meaning, there is no way to reimburse the plaintiffs. The honor and integrity and fair dealing of our government ought to be, and is, on the same high plane that exists between citizens of high character, and the powerful should not take from the weak without compensation. And the spirit of fair dealing of our government can only be preserved by and through its agencies, one of which is the courts. So that it follows, as will be conceded by every person, that the government should make restitution of this money, and, if the power to do so is not with some officer, it should be adjudged by this court, if it has the jurisdiction to do so.
Whether the act of die collector was a tort, or an implied contract to refund by his superior, must be determined from a very few facts. The. government, as per statutes, has the right to tax. The statute in question was open to two supposed constructions. The Commissioner of Internal Revenue adopted that construction in favor of the government. In doing so, he acted in good faith, and with the best of motives. He believed he was within the law, and, so believing, exacted the return and the payment. But it turned out that he was mistaken in his interpretation of the statutes, as was held by the Supreme Court in the case of Vanderbilt v. Eidman, 196 U. S. 480, 25 Sup. Ct. 331, 49 L. Ed. 563, denying the contention of the government and its law officers, and reversing the Circuit Court. So that whether, in the case at bar, the collector did a wrong amounting to a tort when he made the collection, must be decided. If it were a wrong, it can only be avoided by doing another wrong, viz., refuse to abide by a recent decision of its highest court, concurred in by all the Justices. To establish one wrong, ^another wrong must be done. The fifth amendment to the Constitution provides: “Nor shall private property be
The remaining question is as to whether, on the facts of the case, the defendant herein, the present collector, is properly made á defendant. On this question the entire argument, both orally and in writing, of defendant’s counsel, has been on the assumption that this is an action in tort. And I agree with them that if that be so, then this case is at an end. But having already ruled that this is an action on an implied contract, I shall pass on the question now under consideration, with the holding that it is a case of contract, not a tort. There was an implied agreement to refund, when determined that th'e tax was not owing. The collection by the collector was an act within and pertaining to his official duties. ' Therefore the responsibility results from the office. Such being the case, the collector then in office was not personally liable, but, had he survived and remained in office, would have been adjudged liable as an officer, with a certificate, as per statute, withholding-execution. And if this be so, then why is not the successor in office likewise, neither more nor less, liable to a judgment or order? The tax should not have been exacted. But in taking it, the collector was not himself liable. Thus in Jones v. LeTombe, 3 Dall. 384, 1 L. Ed. 647, the action was on a bill of exchange given by a consul of Prance. Held not personally liable. In Hodgson v. Dexter, 1 Cranch, 345, 2 L. Ed. 130, the Secretary of War was sought to be held personally liable on a lease taken for property used by the government. It was held that there was no personal liability, chief Justice Marshall saying:
“The court is unanimously and clearly of tlie opinion that this contract was entered into entirely on behali! of government, by a person properly authorized to make it, and that its obligation is on the government only.”
In Garland v. Davis, 4 How. 131, 148, 11 L. Ed. 907, a like holding was made in an action against the clerk of the House of Representatives. And see Harding v. Woodcock, 137 U. S. 43, 11 Sup. Ct. 6, 34 L. Ed. 580.
The collector acted as was believed his official duties required. Personally he was not in the wrong. Under section 3224 of the Revised
By section 29 of the statute under which the money was collected (June 13, 1898), the executor was required to- sign a statement to the collector, under forms prescribed, and then pay to the collector the tax. But the Commissioner made or had charge of the so-called “assessment,” as appears from section 30 of such statutes. Also, see sections 3182, 3183, Rev. St. [U. S. Comp. St. 1901, pp. 2071, 2072], all of which are in force as to the statute in question, and it is the Commissioner who makes the assessment so far as one is made, and the collector, as the title of his office implies, only collects. In the event of the death of a collector, all lists shall be transferred to his successor; and by the statute of February 8, 1899, an action against said officer shall not abate, but his successor shall be substituted as defendant (Act Feb. 8, 1899, c. 121, 30 Stat. 822 [U. S. Comp. St. 1901, p. 697]). Taxes collected must be duly paid into the treasury.
By Rev. St. § 3220, it is made the duty of the Commissioner to pay any judgment rendered against a collector for internal revenue taxes. And by section 30 of the act of June 13,1898, all provisions as to other taxes are made applicable to that statute. So that we have a case, where the collector has no personal interest, has no discretion but to act, must remit all moneys collected to the treasury, and for excessive collections made under direction of the Commissioner shall have judgments rendered therefor paid off by the Commissioner out of public funds. U. S. v. Frerichs, 124 U. S. 315, 8 Sup. Ct. 514, 31 L. Ed. 470. And to all purposes it is an action against the government. DeSaussure v. Gaillard, 127 U. S. 216, 8 Sup. Ct. 1053, 32 L. Ed. 125; Arnson v. Murphy, 115 U. S. 579, 6 Sup. Ct. 185, 29 L. Ed. 491; Cheatham v. U. S., 92 U. S. 85, 88, 23 L. Ed. 561. In this last case Justice Miller covers the entire situation both as to the collection of the taxes, and then the corrective justice in allowing a suit against a collector of customs and internal revenue when the administrative officers fail to do justice to the individual from whom an illegal tax has been exacted.
So that I conclude;
The collector personally was not in the wrong, and not a trespasser, and that he could not do otherwise than collect.
The money thus collected was paid under protest, and thereby was an implied promise to refund it, as it was not owing.
The collector was acting for the government, and it is the duty of his office to refund, and it is the duty of the Commissioner to furnish the money with which to refund.
The money was collected as a wffiole and was not divisible, and collected as one act, and with one promise to repay.
Counsel for defendant first isolate part of a sentence of Justice Clifford in his opinion in Andreæ v. Redfield, 98 U. S. 225, 25 L. Ed. 158, and base an argument thereon. It is needless to say that an opinion on
The demurrer will be overruled.