*1 §53 vеry I while concur It follows therefore that is section language of majority judg- make in the view not ambiguous. It does broad and is reversed, should be ment of court below though there “employer”, use the word opinion I a trial am of the new should of em- to the contract direct reference employed”. be ordered and that the direction “person ployment and to quashed majority indictment be word “Whoever” uses against in error. may offend person who name the “Whoever” prohibition of the statute. person person; any so- means “Whatever stat- terms very From the ever.”1 majority cogently as ute obvious not intended point the section out uncon- apply extortion to instances of employment.2 with the contract nected But majority imposed limitation history legislative is too as strict section demonstrates. OF INTERNAL REVE- COMMISSIONER subject of a 3041) (S. The bill NUE BAIN PEANUT CO. 2nd Cong.,. Report, 73rd No. Senate OF TEXAS. Stephens the Commit- from Sess. Senator No. 10151. part, “Hear- Judiciary on stated tee on Rack- ings Committee of the Senate Appeals, Circuit Court of Fifth Circuit. money large sums of eteering revealed March pockets of extracted have been contractors, labor, sub- to enrich American April Rehearing Denied contractors, and their officials.” Certain- cor- president or director of a ly if a employee an to kick back poration caused wages dis- part under threat of of his would of such an “official” missal acts prohibition of the section. within the my official opinion In a foreman was not a company. of a The defendant stranger contract in fact or law I employment. think that his conduct prohibition of the statute. falls within the agree majority While I that a criminal strict- statute must be construed ly, the should not be so strict construction deny Congress. as to the fair intendment of I conclude therefore that the acts Laudani statute. did were violation arriving In not at this conclusion I am Judge unmindful of the decisions of Kirk- patrick Court of the United States District Pennsylvania fоr the District Eastern Golder, F.Supp. United States v. Charlick, and in United States F.Supp. 205. The words that care- jurist great weight ful are entitled what cases not he said the cited apposite question judice. sub plain make as do the New International 2 I wish to ma Webster’s Diction ary. Dictionary responsible jority officials The Universal
English Company Language Cape Ann were defines any word Granite “Who, person, person, anybody, course conduct Lau aware may.” Wagnalls parties dani, it, he and did Punk & were nоt who Dictionary Concise Standard defines countenance it. as, “Any excep “Whoever” without one tion who.”
to conform
entered de-
proof,
$38,847.25.
cision
refund of
that,
provides
Section 907 of the Act4
of an
claim for
is made
refund
*3
prima
actually paid,
amount
it shall be
the burden of such
facie
the
by
the
to
amount
borne
Joseph
Key,
Jones,
M.
Louis
Sewall
J.
(not
amount of the
extent
to exceed the
Monarch,
Carloss, Sp-. Assts.
and Helen R.
tax)
average margin per unit of
the
Clark,
Atty. Gen.,
Jr.,
to
Asst.
Samuel O.
during
commodity processed
the
was lower
Atty. Gen.,
Wenchel,
and
P.
Chief Coun-
J.
average
period
margin
than was the
sel,
Revenue,
Ray-
of Internal
and
Bureau
the
during
period
the
and after
tax.
before
Gambill, Sp.
Sidney
F. Brown
mond
B.
and
by
margin
figure
was the
reached
de-
Attys.,
Revenue, all
Bureau of Internal
gross
the
of all
ducting, from
sales value
C.,
petitioner.
Washington,
for
D.
processed
dur-
commodity
articles
from the
Brooks,
E.
Agerton
B.
A.
both
L.
and
commodity
month,
each
the cost of the
ing
Worth,
respondеnt.
Tex.,
Fort
plus
paid
processing
the
tax
processed
HUTCHESON, HOLMES, and
Before
respect thereto,
by dividing the remain-
and
McCORD,
Judges.
Circuit
the
number of units of the com-
by
der
total
during
processed
the month.
modity
Sec-
HOLMES,
Judge.
provided
that the cost of
(b) (5)
tion 907
commodity processed during each
month
Processing
of Review
Tax Board
actual cost of the
(a)
should be
com-
$38,847.25
the Bain
awarded the sum of
to
accounting procedure of the
modity if the
Company
brought un-
Peanut
in an action
thereon,
(b)
or
claimant was based
Act
Title
of the Revenue
VII
der
by
quan-
computed multiplying the
product
processing taxes
relating
refunds of
commodity
by
tity
processed
the cur-
taxing provisions of
collected under the
processing
prices
rent
at
time
ques-
Agricultural Adjustment Act. The
quality
grade
like
and
commodities of
by
petition for
turn
review
tions raised
customarily
where the claimant
markets
undisputed
application
facts
purchases.
his
made
provisions of
stat-
refunding
various
Respondent, in
amеnded claim
its
utes.
Board, proceeded
hearing before
corporation engaged in
Respondent, a
theory
entitled to
that was
com-
peanuts
Texas,
processing
the business of
commodity processed
of the
pute the cost
$96,113.75
processing-
paid the sum of
as
907(b)
described in Section
by
method
the A.
A. The tax
taxes under
A.
pro-
accounting
its
either because
(b),
(5)
unconstitutional,2
Congress
declared
upon actual
or
based
cost
was not
cedure
provision for
the refund of all
made
privilege
elect which-
it had
because
paid
any
who
amounts
so
claimant
methods it desired. Under
two
ever of the
bore the burden
show
could
made,
computations
being
thus
there
no
recovered,
sought to
of the tax
be
amount
the other factors enter-
disagreement
burden,
had
shifted such
nor been
calculation,
per
margin
unit
into the
ing
therefor,
nor reimbursed
relieved thereof
processed
commodity
during
indirectly,
directly or
manner whats
and after the tax exсeeded
period before
22, 1937, respondent
On
filed
oever.3
June
period by
during the tax
margin per unit
$17,793.-
in the sum
for refund
claim
figure,
Having reached
$.0040418.
by increasing
the claim
amending
later
statutory presumption
taxpayer invoked the
$19,780.20. The
thereof
the burden of the
borne
that it had
the claim
disallowed
in full
Commissioner
product
$38,847.25,the
extent of
respondent
ground that
failed to
on the
per
multiplied
unit
margin decrease
the burden of
bore
the tax.
establish
processed
number of units
9,611,375, the
therefrom,
appeal
Processing
Tax
On
period.
respondent
Review found that
Board of
made
the Commis-
of the tax to the extent
The contentions
borne the burden
(1) That
cost of the
to amend
these:
$38,847.25, allowed it
its claim
are
sioner
3 7 U.S.C.A. § 644.
49 Stat.
1748.
§
1 7 U.S.C.A.
2
Butler,
U.S.C.A.
§
States
A.L.R.
commodity processed,
purpose
for the
recommended
governmental
various
de-
margin computation,
partments,.
express
could have
recognition
omitted
enacted,
determined on the basis of actual
principle.5
co‘st
of this accounting
As
processed, despite
compiodity
provides
the loss
A for the
method
cases,
purchases by
identity of the
com- computation
various
margin
in all
commodity,
mingling
fungible
taxpayer’s
of'the
accounting
mode of
adoption of
theory
calculated;
first-in-first-out
enables actual cost to
accounting;
cost
actual
that whenever the
where the
commodity
character of the
cost method is available it is
exclusive
practice
accounting
commodity
whereby
computation
cost,
method
the cost
not admit
actual
processed may
computed;
provides
B
method
becomes available and
*4
computation
taxpayer’s margin
of
on
by
the
a formula
actual cost
which
assumed
the
of the
cost
com- may
computed.
basis
actual
of the
A
We think method
be
modity,
theory,
using the
available,
may
first-in-first-out
is exclusive if
it
but that
admittedly
presumption
the
raises the
that
only
be- used
where
actual cost of the
the
by
taxpayer;
(2)
taxes were not borne
commodity processed may
computed
the
that,
taxpayers proof
whether or
the
assumptions;
not
without resort to theoretical
presumption
enabled it to invoicethe
favor,
in its and that method B was
to be used
intended
by
instances,
the
was rebutted
including
in
other
this
all
one.
undisputed
that the
of the
burden
taxpayer’s
shifted;
On the
of the
basis
mar
(3) that,
any
been
tax had
event,
in
gin computations,
prima
it made
out a
facie
taxpayer
the
not
re-
wаs
entitled to
statutory
with
the
presump
case
the aid of
$19,780.20,
fund
an amount
of
in excess of
by
done,
tion afforded
This
907(a).
Section
since the claim filed with the Commissioner
the
of going
burden
forward with
evi
required
was
the
to set
the
of
aggregate
forth
Commissioner,
shifted to the
re
dence
quired
and
the
of
amount
the'tax that had
borne
been
proof
of him
the
by
taxpayer,
either that
tax
together
supporting
with
payer actually
escaped
shifted or
data,
otherwise
amount of the claim so filed
claimed,
$19,780.20.
burden of
or that
only
was
by
relied
the tax
Turning to the first contention of payer
properly
was not
available to it. The
Commissioner,
finding
think the
burden, and
Commissioner undertook this
the Board that the actual cost
was
method
attempted
presumption by
to rebut the
un
taxpayer
not available
by
supported
to this
proof
taxpayer adopted
contradicted
that the
Respondent pur
substantial evidence.
practice
general
shifting
and followed a
peanuts.at
chased some
place
by billing
the burden of' the tax
the tax
business,
farms;
peanut
some at
were
some
separately
increasing
to its vendees
by
bought
employees,
salaried
others
prices
every possible
sales
in
circumstance.
peanuts
commission men. The
were stored
907(e)
provides
the Act
Section
that
bags
warehouses,
in
shipped
in
about,
various
were
statutory presumption may be
rebutted
ultimately
in
were
consumed
by proof
actual
extent to
regard
mills without
period
supply
to source of
claimant did not bear
burden of the
storage,
From
moment of
proof
tax,
but
including
not limited to
peanuts
storage, the
their identity
lost
existing
modified
contracts of
respect
purchased,
to when
whom
sale, changed
price
the article
sales
purchased,
purchase price,
and the
but it
by substantially
processed
the amount
clearly appears
peanuts
bought
first
tax,
separate
billed
as
item
peanuts
processed.
were not
first
It was-
vendee,
any
any writing
in
to
or indicated
respondent’s
peanuts
custom to store the
in
price
sales
that the
included the amount of
front,
its warehouses from back to
to
proof
There
much
of this
tax.
was
shipment
remove them
to the mills from
Board;
nature
but was the
before
front to back.
that, although
Board’s view
the evidence
When the final
draft
the Act
escaped
showed
had
in Congress,
was under consideration
it was
paid
appreciable
to an
burden
tent,
ex-
theory
that the
proрosed
first-in-first-out
it failed
burden
to show
incorporated in
should be
as a
$57,266.50,
taxes
paid
excess of
the amount
costs,
basis
assuming
theoretical
refunded,
actual
sought
passed adopted
Act as
language
but the
taxpayer;
not been borne
it accord-
Congressional
part
Record,
8, pages 8662,
See
Vol.
existed,
reason
the tax was
presumption had
time
that the
ingly held
levied,
in-
believing
recording
such
rebutted,
the refund.
and awarded
might
future benefit. We
formation
be of
illegal
taxes
In actions to recover
plain purpose
Congress
think
States,
ly
the burden
collected
creating
was
obviate
trial
plaintiff throughout
cases
nei-
necessity
strict
pos
has in its
prove
the defendant
the Commissioner
ther the claimant nor
money
equity
good
con
that in
session
the burden of
directly
could show
whether
plaintiff.
be refunded
science should
nof
If no
the fax was or was
borne.10
is for an amount
refund claimed
Where the
available,
presumed margin
and if
taxes,
the claimant
paid
processing
profit
claimant was lower
gross
prove
required
that he
further
statute
otherwise, the
period
during the tax
than
never
tax and
the burden of the
bore
probability
bore the burden
existed
Proof of
lower
it in
manner.
shifted
tax;
likewise,
presumed mar-
of
gin
if the
prima
profit
period made
during the tax
period,
not lower
the tax
issue,
ultimate
facie evidence
reasonable
assume that
was
burden
statutory rule is
only effect
but the
shifted.
that the
an inference
burden
create
*5
borne
the сlaimant.
tax was
may
claimant under the statute
A
burden of
governing
The law
case,
margin
if his
is shown
make out his
6
proof
matter
substance.
It is never
is a
of
period, by in
to be lower
presumption to
function
a rebuttable
presumption, but
all cases
in
voking
proof;
shift the burden of
office
prima
proof
so estab
facie
where the
lished,
may
take
supply an inference which
may
rebut
the Commissioner
produced.7
place
proof
not otherwise
by proof
presumption
that
burden of
рresumption
statutory
here invoked
If
shifted,
proof may include
was
which
tax
probative
ac
force
given
be
should
prices
product
that sales
evidence
Board, it
would have
corded to it
approximate amount
were increased
proof;
burden
shifting
effect of
imposed,
that the
of the tax
effect,
but
it
it does not have this
because
separately.
un
The
billed
a mere
evidence
not of substantive
rule
by the Com
adduced
contradicted evidence
presumption that
law.
yields readily
8
It
is a
taxpayer actual
showed that this
missioner
evidence,
cir
direct or
tax;
pre
ly
the burden of the
did shift
cumstantial,
has no effect in excess
rebutted;
completely
it was
sumption was
temporary
a
mere
inference
fact that dissolved;
burden reverted to the
and the
duty
pro
casts
the defendant
with
or
to come forward
claimant
suffer
ducing sufficientevidence to rebut it. When
it.
against
entered
judgment
to be
end;
done, the
is at an
that is
disappears
inference
favorable
being
the Board
The decision
to it on the basis of
entirely,
proof
the burden of
alone,
beginning.9
remains as it
in the
existed
present proof
respondent had no reason
presumption obviously
which
bore the
was cre of
extent to
actual
be
recognition
difficulty
Opportunity should
ated in
attend
of the tax.
burden
proof
proving
extent of
make such
ant
afforded
upon
shifted,
no
burden either borne or
since
remand.
6
White,
proof,
kinds of
R.
v.
238
rebutted
various
other
Central Vermont
Co.
507,
865,
1433,
proof
In
35
59
excluded.
order
S.Ct.
L.Ed.
U.S.
expressio
Ann.Cas.1916B,
unius
the rulo
est exelusio
252.
avoid
Congress
pains
pro-
7
Cir.,
alterius,
States,
5
125
took
Howard v.
may
proof
986,
include,
that “such
but
F.2d
vide
Turnip
to,”
expressly
8 Mobile,
R. Co.
not be limited
J. & K. C.
v.
shall
emphasizes
42,
seed,
136,
35,
31 S.Ct.
55
mentioned. This
intention
219 U.S.
ordinary pre-
L.R.A.,N.S., 226,
78,
statute
create an
32
Ann.Cas.
of the
sumption
L.Ed.
might
by any
1912A, 463.
be rebutted
competent
Turnip
evidence,
9 Mobile,
either
or cir-
& K. C. R. Co. v.
direct
J.
seed, supra;
N.
New
& E. R. Co.
cumstantial.
Orleans
Mfg.
10
535,
Davis,
367,
Harris,
Anniston
Cf.
Co. v.
301
247
38
U.S.
S.Ct.
v.
816,
1143;
337,
81 L.Ed.
& A.
R.
85S rebuttable that the decision should to shift the-burden- Since hold proof, unnecessary Donnan, the of reversed, citing to decide Heiner v. 285 U. it is e., question, claim- S. while remaining i. whether the 76 L.Ed. S.Ct. language opinion top in of the the ant was to refund excess of that at the entitled decision, page supports respondent, amount set claim filed with tha forth proceed- not, dealing Though further itself since court was Commissioner. likely presumption. with a anticipated, it is not ings herein are conclusive It was question dealing and. presumption, with rebuttable again. that this will arise reversed, effect appealed from is that the statement shifting latter had the order cause proceedings further burden of dic remanded for opinion. tum. not inconsistent with As authority statement, for this the court- HUTCHESON, Judge (dissent- Mobile, cited Turnip & K. C. R. Co. v. J. ing). seed, 35, 43, 55 L. majority the tax agree I with L.R.A.,N.S., Ed. turn to 226. If we agree prima I payer made facie case.' out a that case, we find that the dealing court was them, too, supports if the record disputable with a presumption. It said Commissioner under view that their part, beginning page 42, U.S., of 219 showing prima facie 907(e)1 rebutted the L.R.A., page S.Ct. at 907(a), under taxpayer made N.S., 226: “The law of evidence is full finding Board erred presumptions law. either fact further him to requiring without make are, course, former disputable, The the and. however, agree myself, proof. I find strength inference of one the Board ment with the statement depends upon of another *6 before (respondent the Cоmmissioner generality experience upon failed, the to rebut Board) attempted, but * * * Legislation it is founded. presumption established providing that proof of one fact shall- too, with agreement, in I am (petitioner).2 prima facie of the constitute evidence taxpayer is that Board the the view main fact but .enact a rule in issue is to $19,780.- recovery to the limited his not evidence, quite general of power and within the it, and the of forth as sum originally set 20 * * * government. of are- We $38,847.25. of full may recover the amount impressed argument not with the that the 183; Cir., States, 2 105 F.2d United Pink v. supreme Mississippi, court in constru of States, 289 v. United Bag Co. Bros. Bemis act, ing the has declared the of effect 1011; L.Ed. S.Ct. U.S. tric Elec presumption create a of lia the statute is to bility, D. Battery McCaughn, Storage Co. v. it, thereby, giving an effect in ex to Memphis States v. C., 54 F.2d temporary of of fact. cess a mere inference 62, 53 Co., S.Ct. 288 U.S. Oil Cotton * * * only in legal of this effect 15(b) Rules Rule L.Ed. 619. Cf. cast railroad com ference is to the sec fоllowing 28 U.S.C.A. Procedure Civil duty evidence pany producing some the the therefore, dissent from I, 723c. tion in contrary. the the When that done to is and remand. reversal end, question of is at an and the ference jury, upon all of negligence is one for Petition for On Rehearing. evidence.” llie HOLMES, Judge. compare Turnipseed case If we Henderson, petition R. rehearing, In its A. R. Co. v. respond- with & Western exception takes to the statement in our 279 ent stat- opinion that it never the the difference bеtween a is of a observe function shall processing “Either claimant Commis billed to its either may presumption separate rebut items in- sioner estab vendees as or otherwise (a) by- of this lished subsection thereof in its sales section cluded the proof prices. the actual to fails extent which the This evidence to show with respect to others the transaction actual ex- claimant burden of shifted may processing petitioner (Italics supplied.) have tax.” tent to which the 2 “Resрondent attempted proc- rebut to others burden of the shifted essing presumption petitioner established Therefore it is held that tax. 907(a) petitioner entitled to is a refund under under Revenue Act by adducing prima-fa- certain said and in accordance tlie evidence showing (Italics purpose petitioner presumption.” supplied.) cie merely supplies margin profit inference that the ute that fact in an was less period, upon proof contradict- the absencе of evidence that there inference, cre- ing were such a statute instances wherein the tax was not and effect given Respondent’s an shifted. argument ates of inference that is would against oppos- weighed presumption have the standing evidence to as a witness every ing testimony. The latter for the instance where and, par- unreasonable; private margin during period was between low- ties, due-process plaintiff clause of er violates failed otherwise to meet imposed by if a proof Fourteenth Amendment created the burden sub- case, Turnipseed state statute and the Fifth clause of same stantive law. In the su- pra, disputable if Act of expressly Amendment created an held it Congress. question of effect, presumptions they While there is no no such had process ques- inference, case, merely only temporary due created a weight character of that, upon tion as to the the introduction evidence Congress intended to cre- contrary, “at ate, nature of the two the difference in the an end”. presumptions persuasive arriving Henderson, In Western A. R. R. Co. v. & legislative intent. wholly it supra, the held that was ar- court say that a We it think inaccurate pre- bitrary unreasonable to leave disputable presumption has the effect of give sumption in case and it the effect proof. The law shifting the burden of testimony rebutting it of evidence after matter is a of sub- to the burden constitutionality introduced. stance,1 law a case substantive Turnipseed in the prima facie statute proceeds. A change as the trial merely it upheld because created case may supply an inference rule of evidence that van- temporary inference party upon whom the bur- in behalf opposing ished the introduction rests; but, if that inference den rebutted, case, Henderson the stat- In evidence. entirely disappears held invalid because the inference ute was governing the burden of law case and the proof given the effect was weighed constant. remains testimony against opposing and was o prevail testimony such was found unless case, disputable In the instant words, In shifted preponderate. other *7 upon proof of play presumption came into therefore was held the burden profit less margin of fact the during arbitrary, unreasonable, and violative to be compelled in period; Fourteenth Amendment. the tax was borne the burden ference that inference tаxpayer; but this question before us is one of the na The production di wholly rebuttable created and effect ture showing evidence rect or circumstantial prima-facie Does it the federal statute. possible was every instance that in temporary merely inference create a pro practice intention and settled op upon the introduction that vanishes purchaser. pass on tax to the cessor to evidence, it create an infer posing or does once, only play into came given the effect of evidence? that is ence operation ended introduc lawmakers an ascribe We should intention to create of the tax that the burden tion evidence chang inference that every possible passed on in in law, the substantive shifts the burden of es prove should If then stance. proof, throughout stands the trial as a wit tax had not been in some instances that passed taxpayer, supplies ness without on, would revive peculiarly facts within the knowl pro it would tanto though presumption, taxpayer, edge of the is of a nature proof resting upon the meet the burden to the in the Hender similar plaintiff. denounced case Su son arbitrary, unreasonable, preme not be revived Court as presumption would due-process upon proof clause.2 dependent and violative creation because White, Corporation Molasses Commercial R. v. 238 U. Cf. v. Vermont Central Barge 507, Corporation, 865, 1433, York Tank Ann. Nеw 59 L.Ed. 35 S.Ct. S. 111, page Cas.1916B, at New Orleans & N. E. U.S. page Harris, wherein Mr. Chief R. Co. v. said, Justice Stone “Whether label L.Ed. equivo- permissible Henderson, inference with & R. Western A. R. Co. presumption created We think the dealt nature of that federal is of the statute Turnip- K. R. Co. v. with in Mobile & C. J. Therefore, petition re- seed, supra.
hearing is denied.
HUTCHESON, dissents. Judge, Circuit PEKIN UNION &
TENNANT PEORIA CO. RY.
No. 8128. Appeals, Circuit. Seventh Court of 31, 1943.
March May 13,
Rehearing
Denied
*8
merely
‘presumption’
Co.,
or consider
term
cal
Q.B.D.
Insurance
3
594. Cf. Del
Bowers,
280,
is a rational
inference from the
Vecchio v.
296 U.S.
require
proven,
190,
229; Wigmore, op. cit.,
it does no more than
facts
80 L.Ed.
bailee,
inference,
supra,
2485, 2490, 2491,
if would avoid
§§
and cases
go
with evidence sufficient to
forward
cited.”
persuade that
the non-existence of the
also
Cf.
Connecticut Mut. Life Ins. Co.
fact,
inferred,
Lanahan,
Cir.,
375,
page
which would otherwise be
6
112 F.2d
at
v.
probable
376,
as its
is as
existence.
It does
wherein the court said:
“It
is con
shift,
general
respect
not cause the burden of
ceded that
rule in
go
presumption against suicide,
appli
forward with
if
bailee
enough
validity
Michigan,
presump
to raise doubts as to the
cable in
and that
inferenсe,
the trier of
which
fact is
tion is not to be treated as evidence and
resolve,
disappears
testimony
unable to
the bailor does not sus
when
is offered to
persuasion
Metropolitan
tain the burden of
it. Stuckum
rebut
v.
Life
upon him,
Co.,
the whole evidence remains
Ins.
283
891;
Mich.
277 N.W.
n
it rested
Co., supra
the start.
Shiovitz v. New
Souther
York Life Ins.
Prescott,
181];
[240
[281
v.
R. Co.
Mich.
275
36 S.
N.W.
Abbott
Metropolitan
Co.,
279 U.S.
v.
Life Ins.
Mich.
Parkersburg
433, 439,
Co.,
Compare
& M.
Cir.,
v.
Sand