228 F. 246 | M.D. Penn. | 1915
This suit was brought to obtain the repayment of'a special excise tax collected by the defendant from the
“The said taxes were unjustly and illegally assessed against it by the Commissioner of Internal Revenue, and were illegally and wrongfully collected for the plaintiff by the defendant, as collector as aforesaid, for the following reasons, to wit: That prior to the beginning of the year 1909 the plaintiff leased its mines, railroads, and other property, and since that time to the time of filing this complaint has not had them, or any of them, in its possession or control, and has been engaged solely in collecting and distributing rentals derived from the leases made by it as aforesaid, and has not been engaged in business.”
“Plaintiff has in fact never gone out of business in connection with its said property, nor disqualified itself from any activities under its charter in respect thereto, and is still actually engaged in the doing of business within the meaning of the statute and in the capacity necessary to make it subject to the act of 1909.”
These allegations are too general to avail the pleader, and are expressive of conclusions which must be ascertained by the court from specific facts alleged.
‘•That the plaintiff keeps and maintains an office lor the transaction oi' its business at Dushore, in the county of Sullivan, and state of Pennsylvania, and did keep and maintain such office during the years 1909 and 1910, and that the president of said plaintiff corporation is a resident of Dushore, and maintains his office as president of said- road at that place. That the said plaintiff has continuously since the year 1909, and prior thereto, maintained its corporate existence and organization by the annual election of a president and board of managers, and the said board of managers has annually since; the said date elected officers of the said corporation. That, further, the said corporation has maintained since the year 1910, and prior thereto, an active corporate existence, has continued to exercise during that time certain of the functions for which it was chartered, has received and still receives an income in the shape of rental, and distributes dividends to its stockholders. That the said plaintiff holds itself in readiness, whenever the terms of the leases referred to in the plaintiff’s statement of claim shall be violated by the lessees, to resume the act of operation of its properties. That in the leases referred to in said statement of claim it has reserved the right to develop the forests upon its lands, and to remove timber therefrom. It has also reserved the right lo mine everything underlying its properties except coal. That it has, since executing the said leases, assumed certain mortgage indebtedness, the interest on which it pays, and which it is preparing to liquidate and settle, and that it guarantees perpetually to defend, at its own expense, the lessees in the enjoyment of its property. That the said plaintiff, through its officers, made returns of its annual net income for the years ending December 31, 1909, and December 31, 1910, as more particularly referred to and stated in the statement of claim filed by it in this case. That it had, during the years aforesaid and prior thereto, kept and maintained at its offices stockbooks for the transfer of its capital stock, and the transaction of all business properly relating to and connected therewith.”
Nearly all the alleged activities of the plaintiff corporation were present in the controlling case of McCoach v. Minehill R. R. Co., 228 U. S. 298, 33 Sup. Ct. 419, 57 L. Ed. 842, where it was held that any and all of them were insufficient to constitute a “doing of business” within the meaning of the Corporation Tax Act. That the plaintiff made covenants to defend the lessees in the enjoyment of their property, or that it retained control over timber on the property leased and reserved the right to mine everything but coal, does not alter the case. It is not the power to act, but the actual activities in certain directions, which may constitute a “doing of business.” U. S. v. Emery, Bird, Thayer Realty Co., 237 U. S. 28, 35 Sup. Ct. 499, 59 L. Ed. 825; Abrast Realty Co. v. Maxwell Co. (D. C.) 206 Fed. 333; Cambria Steel Co. v. McCoach (D. C.) 225 Fed. 278; Miller v. Snake River Valley R. R. Co., 223 Fed. 946,-C. C. A.-. Accordingly it was held in Traction Co. v. Collector of Internal Revenue, 223 Fed. 984,-C. C. A.-, that where the lessor covenanted to protect the lessee in the full enjoyment of his property that this did not constitute a doing of business, even though the lessor allowed -the use of its name in a suit to prevent interference with the lessee’s enjoyment of the property.
Nor can the plaintiff be said to be doing business because of the allegations that the company, since executing the leases of its property, has assumed mortgage indebtedness, that it pays interest on it, and is preparing to pay its principal. It is admitted that such mortgage indebtedness was in fact assumed prior to the time for which the taxes were assessed. The mere paying of interest on indebtedness of any
“All suits * * * for tlie recovery of any internal tax alleged to have been erroneously assessed or collected, or any penalty claimed to have been collected without authority, * * * should be brought within two years next after the cause of action accrued and not thereafter; and all claims for the refunding of any internal tax or penalty should be presented to the Commissioner * * * within two years next after the cause of action accrued and not thereafter.” 17' Stat. 257, c. 315, § 44 (Comp. St. 1913, § 5950).
See Wright v. Blakeslee, 101 U. S. 174, 25 L. Ed. 1048.
No suit can be maintained under the law until an appeal has been taken to the Commissioner. If on the appeal the claim is rejected, an action may be maintained against the collector (Rev. Stat. §§ 3226, 3227, 3228), and through him, on establishing the error or illegality, a recovery can be had. When the Commissioner rendered his decision, rejecting plaintiff’s claim, the right of action was complete. It was then that plaintiff had a right to bring this suit, which was not barred when actually entered.
*251 “In suits against collectors to recover moneys illegally exacted as taxes and paid under protest the settled rule is that interest is recoverable without any' statute to that effect, and this although the judgment is not to be paid by the collector but directly from the treasury.”
The exceptions are sustained, and the rule for judgment is made absolute. The clerk is instructed to enter judgment for the amount collected, $696.90 and $693.04, with interest from June 30, 1910, and June 30, 1911, on the respective payments.