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United States Supreme Court

104 U.S. 728

United States  v.  Savings Bank

APPEAL from the Court of Claims.

Sections 3220 and 3228 of the Revised Statutes are as follows:--

'SECT. 3220. The Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized, on appeal to him made, to remit, refund, and pay back all taxes erroneously or illegally assessed or collected, all penalties collected without authority, and all taxes that appear to be unjustly assessed or excessive in amount, or in any manner wrongfully collected. . . .

'SECT. 3228. All claims for the refunding of any internal tax alleged to have been erroneously or illegally assessed or collected, or of any penalty alleged to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, must be presented to the Commissioner of Internal Revenue within two years next after the cause of action accrued. . . .'

The material regulations prescribed by the Secretary of the Treasury applicable to this case are these:--

'Claims for the refunding of taxes erroneously assessed and collected should be presented through the collectors of the respective districts upon blank form No. 46. . . .

'The collector should keep a perfect record, in a book furnished for the purpose, of all claims presented to the commissioner, and must certify as to each claim, whether it has been before presented or not.

'Where the case of an appeal involves an amount exceeding two hundred and fifty dollars, and before it is finally decided the Commissioner of Internal Revenue will transmit the case, with the evidence in support of it, to the Secretary of the Treasury for his consideration and advisement.

For some years it has been the practice of the officers of the Treasury Department to regard appeals for refunding taxes illegally assessed and paid, when deposited with collectors, under the rules, in season to be forwarded to Washington within the two years' limitation, to have been duly presented to the commissioner according to law.

On the 10th of July, 1878, the Real Estate Savings Bank of Pittsburg, Pa., paid to the collector of internal revenue for the proper district in Pittsburg, certain internal taxes which had before that time been assessed; and on the 9th of July, 1880, it presented to the same collector, at his office, an appeal to the Commissioner of Internal Revenue, made out on the blank form prescribed by the secretary, to refund and pay back $972.69, which, it was alleged, had had been illegally assessed, and erroneously paid. This appeal was delivered to the collector in time to have reached Washington by due course of mail on the 10th of July, if t had been promptly forwarded; but it was retained until the 15th, when it was sent to the commissioner, with an indorsement by the collector that he had investigated the facts, and found the statements of the claimant were in all respects true. The papers reached the commissioner on the 17th of July, and he, on the 13th of October following, submitted them to the Secretary of the Treasury, as required by the regulations, for his consideration and advice. On the 18th of October the secretary signified to the commissioner his approval of the payment of the claim, and on the 21st the commissioner certified its allowance. On the presentation of this certificate through the accounting officers of the Treasury Department payment was refused. The certificate has never been revoked by either the secretary or the commissioner, but it is still in force so far as the action of these officers is concerned. After payment was refused, suit was brought on the certificate in the Court of Claims, where judgment was given for the claimant. From this judgment the United States appealed.

The following points are taken from Mr. Lawrence's brief:

I. The claim is barred because not presented at the office of the Commissioner of Internal Revenue in Washington within two years.

1. The statute says such claim 'must be presented to the Commissioner of Internal Revenue.' Rev. Stat., sect. 3220. The commissioner has an office 'in the Department of the Treasury' (id., sect. 319), and this 'shall be at the seat of government.' Id., sect. 233. The claim is to be 'settled and adjusted in the Department of the Treasury.' Id. 236. Effect is to be given to the words as they are, 'not importing . . . words . . . not found there.' Leavenworth, &c. Railroad Co. v. United States, 92 U.S. 733, 751. A presentation at Pittsburgh is not a presentation 'in the Department of the Treasury.'

The 'treasury of the United States' is 'in the treasury building,' and there the treasurer performs his duties. Rev. Stat., sect. 3591.

Banks are required to make returns for taxation 'to the treasurer.' Id., sect. 5215.

If for the convenience of the banks a regulation is made (id., sect. 161) permitting them to make reports 'through' a sub-treasurer, are the banks relieved from the duty to still make them 'to the treasurer'?

2. The 'regulation' does not change this. It says claims 'should be presented through the collector.' 'Should' is not 'shall,' and if so, 'through' is not 'to.' This permits presentation through a collector, but contemplates presentation to the commissioner. The regulation is to be construed in harmony with the statute, which gives the claimant a right to present directly to the commissioner, but permits a collector to aid him.

3. The commissioner had no power to receive the claim after two years, and any action thereon was ultra vires. An officer cannot waive a right denied by statute. Andrae v. Redfield, 12 Blatchf. 407; United States v. McKnight, 98 U.S. 179. The claim is, as said in United States v. Kaufman (96 id. 367, 570), 'impeached for . . . mistake.' 4. The duty imposed by statute on the commissioner cannot be delegated to a collector. Delegata potestas non potest delegari.

It is the right of the claimant to have the privilege of presenting his claim at the office of the commissioner.

5. A claimant cannot impose a duty on a collector to receive a claim. Official duties are fixed by law. Ames v. Huron, L. & B. Co., 11 Mich. 147; Cooley, Const. Lim. 363, 451.

II. The allowance of the commissioner does not give a prima facie right of action. Rev. Stat., sect. 1059.

The test, whether such allowance gives such right, is this: Is it evidence of a 'promise on the part of the United States to pay' (United States v. Kaufman, supra), or an award showing a debt due; that is, does it per se so operate? If it does not, per se, impose a duty on all officers charged with duties in relation to it to make payment without examining the evidence on which iti § based, how can it be said that it is the evidence which the law requires of a right to payment? If other steps are by law required to secure payment, how can it be, Per se, prima facie evidence of a right to payment?

1. It is 'a mere step in the system of internal revenue.' House Ex. Doc. No. 27, 2d Sess. 45th Cong., p. 43.

2. The whole power of the commissioner is found in the words 'to refund and pay back.'

These had a meaning when first used in the act of June 30, 1864, c. 173. The commissioner did literally 'refund and pay back,' 'by drafts drawn on collectors of internal revenue.' This power was taken away by the third section of the act of March 3, 1865, c. 78, and the words to 'refund and pay back' became inoperative,-they ceased to have a meaning. The commissioner could no longer literally 'pay back.'

Such claim cannot be paid unless it has been 'settled and adjusted in the Department of the Treasury.' Rev. Stat., sects. 184, 187, 236, 248, 269, 277, 305, 313; McKnight's Case, 13 Ct. Cl. 302; 1 Op. Atty.-Gen. 624, 680; 2 id. 507; 10 id. 5.

The claimant must 'pursue the statutory remedy to the end.' United States v. Kaufman, supra.

3. To hold that these words authorize the commissioner to give evidence of a prima facie right of action seems objectionable. The law (Rev. Stat., sects. 989, 3226, 3227) recognizes a remedy by action against a collector. It would seem improbable that Congress intended to give a duplicate remedy by action on the allowance of the commissioner.

If the allowance of the commissioner gives prima facie right of action against the United States, it is not barred until six years (id., sect. 1069), when the government may have lost the means of impeaching it, whereas Congress seems to have intended to limit the remedy by requiring a presentation within two years to the commissioner (id., sect. 3228), and for a short period against the collector. Id., sects. 983, 3226, 3227.

The approval of the commissioner has no element of a contract. He is not authorized to contract.

4. It will enable a claimant to withdraw from the government the benefit of an examination by the proper accounting officers.

It should require clear language to produce such a result.

Whenever Congress has intended to withdraw from this supervision any class of cases, it has been done in very explicit language. Rev. Stat. sects. 48, 1089, 1911.

III. Congress having given another judicial remedy, it is to be deemed exclusive. Rev. Stat., sects. 846, 989, 3226, 3227; State v. Marlow, 15 Ohio St. 114; Commonwealth v. Garrigues, 28 Pa. St. 9; Commonwealth v. Baxter, 35 id. 263; Commonwealth v. Leech, 44 id. 332.

The Solicitor-General, Mr. William Lawrence, and Mr. John S. Blair for the United States.

Mr. George L. Douglass for the appellee.

MR. CHIEF JUSTICE WAITE, after stating the case, delivered the opinion of the court.


This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).