OOMMISSIONERS OF THE SINKING FUND OF LOUISVILLE V. BUCKNER.
533
These Ilre oUf, villws on the subjeQt, in which both judges concur. They cover the whole, gronnd i and my associate, Judge CHOATE, says that he has nothing to add.
CoMMISSIONERS OF THE SINKING
Fmm et
aZ.
OF LoUISVILLE et
al.
tJ. BUCKNER
(Oftrcuit Court, D. Kentuc1ulli
1,1891.)
A suit agllinst an internQo1 "revenue collector to recover taxes alleged;to have been Ule/rallycpllected is cognizable in the cil'Cuit court, both under Rev. St.V., s. S 629, giving that court jurisdiction of 'causel> arlsiIig under any law providing internal revenue,and under Aot Congo Maroh 3,,1887, giving it jurisdiotlon of 'Causes arising unller the laws of the United States, t. LIt,IITATlON OF ACTIONS'-D:BMURRER. ' , In.a suit to ,recover internal revenue taxes alleged to ha.ve been Uleg"lly collected,' where,the c(lIllplaint shows that more than two Years have, tl;lel'll-' fore barred, by Rev. St. U. S.S 8227, the bar may be raised 'l/y deml:/.rrer, SlDce that section oontains no exceptions. ' .'., ", ',
:L
CIROl1ITCOURTS-JURISDIOTION-SUIT TO RECOVER INTBBIUL TAXES.
a.
'As the rIght to sue the United States through its colleotors, toreoorer taxes Qo1: leged to have been illegally collected, is only a remedy given by stat'lte, nb' such' . right exists, uuless the conditions prescrU>ed by ;Jiev. St. U. S. are strictlyellmpllild with uamely, that an appeal must llrst 'be taken to the commissioner of internal revehue, and the suit must'be broughtwtthin two'yearl> from the date :' ," , The rule statl;ltes of run against app1y in , favor of a CIty, in Vlrtull of'the governmental pOwers exerCIsed by it, in respeot to ,a claim of the city against the United States for taxes alleged to have been illegally colleoted. ' SAME-RJ;lMOVAL OF LIl\IiITATIONSP.F ACTIONS..--lJLA,IM BY CITT.:" .' : . ' " ,
;Et1!lPQVER.
,.,,'
,·
'
", '
,
4.
.5.
a
Congo o!une 16, miSSIOner of lDternal revenue ttl audIt and adJust the claim of the CItyo! LOUIsville "for internal revenue taxes on dividends on shares of stock" owned by tbe city in the Louisville & Nashville Railroad Company, "to the exteut that suoh t'!oxes :were deduoted from any dividends due'and ,payable.," and to pass upon :the olaim "in t1).esame mauner as if saillclaim bad been p!"6sented and proseoutell the time limited and fixed by Held, that tbIS removed the bar of the '!ltat1ite of limitationsagaiust the ,claims speci1led, in ,respect both to taking an appeal trom the colleotor to the commiSSioner of internal revenue, as providEY.1 in Rev. St. U. S. S 8226; and to the time of bringing'suit, as provided in section 8227.' ,', But tl:Ie words of tbe act, "taxes on dividends on shares of stock" ownlld by the oity, do not iuclude taxes paid by the railroad on its gross receipts and on undivided profits, aud tbebar is not removed as to a claiIIi tberefor. ' , ,
8,b,B.
.',
, , '
.
SAME.'
"
'7. SAME-INTEREST ON ILLEGAL TAXES.
As thE! taxes were originally paid without Ilrotest, and no appeal was taken to the commissioner of internal revenue, and no demand made for repayment; no in. terest would have been allowed on the claim, under the general policy of 'the governmell-t, if it bad been proseouted before the statllte had run, to completion; and therefore, as the act of 1f:lQOautborized judgment to be rendered on the claim "in the same manner and with the same effect 8S if said claim bad been presented aud ' proseouted within the by law," no right to interest was givellthereby.
At Law. Action by the commissioners of the sinkIng fund ,of Ky., against Lewis ,F.13uckner, as executor of James F. Buckner, .and others; to' recover' taxes to have been 'illegally .collected by' . ,'. i . ., . , .. , ,': "., ,
534
, ,
Janles F. collector revenne for 'the 'United Statlls., H.eard on detriutreHo,the'1)iU.Derntlrrer Albert S. and Ji'. T. Ji'ox, for plaintiffs: l ,; ',: , George W. Jolly, U. S. Atty., for defendants. BARR, J. The plaintlffs sue the defendants, who are the executors and of James F. Bucknrr, for varions sums of money, which as collector of 'internal fot this district, i'eceivedbefore the 1st of May, 1872, and which they allege were taxes illegally assessed and collected of Louisvil,le & Nashville Railroad QRmpany, under the authority ot various acts'of congress. 'The city of LOuisville was at the time a large stockholqef ,io said compaQY, and plaintiffs claittlthat thtl taxes which were assessed aJ;ld collected of said company on the city's sh$.re 0 f the gfo,ss the, undividedsurplus, and the dividends (cash and stoCk)iofsaid company were invalid. Neither the city of Louisville nor the cOlDmissioners ()f tbe sinking fund had'marle application to have said taxes refunded within ,the time or in by cQngress.Coogl'pss,;hy ,an act approved June 16, 1890, imd entitled "An act for tbe relief of the board of, the commissioners of the !sinking fnndof the city of Lonisville, Ky.,"
as toUow,a;,
' .'
the ce>mmissioner:Of,internal revenne,be. amUhey lueberebYdluthorized and required toandit and adjust the claim of the board of the sinking fund commissioners oHhecity of Lonisville, Kentucky, .for internalreveuue ta'(eB on dividends on shares of stock' owned by, \liM; said <:ltj tifLollIsvlUe'in thl' IiJllisvilleand NashVille Railroad to the e.ltJeQt'tbatsuch taxes were, \Jeducted.from any dividends dne lind rayahie to said board, and to pailS upon said claim, and render as if said jUdgment .thereoninthe same Illanner"and wi,th claim hall, the ti,lllelimited and fixed by law."
The their elaimnnner this law, and the secretary of the internal revenue allowed them $42,. 514.03, has been ,pnidby th? United States. This BlIm was the taxes colleCted' on the divi4ends, both .cil$h andlltock, which were declared by the railroad company and prlid by the city of Louisville. They, howeVel',.'reJilsed, to 'allow any interest, or tt' tl:ie 'taxes which had collected.on the gross receipts, and the taxes on the undividedprofitsor surplus. " ; .' , .' ,. " ,.. ,. ' , to. on 72 from May 9, 1872, wmch,.sum istheamonnt of taxes; he collected ?n, dividends belonging o,f and wh'ich had to plaintifis without 'interest; and,the sum of $4;590.57; which is ,the city's share ofth'e 'tiixe!llilleged to navA heen received by said Buckner, as collector, f;rom the, "with fr"om November, M,' ,;Whic,h aI, leg,e,d,' to,',' ; been Cl\y'S snare of ,the' un4ivided SlffP¥ts or profits, WIth interest1frolu November 10, 1871.' "
:,::,1,.'"",
",!.:
','
COMlIHSSIONERS OF THIf SIN¥I:>G FU:;D .OF IoOUISVIJ,LE V. BUCKNER.
535
demurred to and alleged several grounds therefo:r., .. The nrst is that this court has.no jurisdiction. The plaintiffs and defenqal1ts are citizens of the same state, but we thinlf this is a cause arising under a law of the United States providing interxjal"revenue, aud is ohe of oreases of which the circuit cQurt is by the of section 629, Rev. St. It is a case arisiJ;).g laws of the United States, and is clause of the pf :M,'arch3. 1887, which gives the circuit court of causes thelaw!'j of the United states. 25 St. at Latge, p. 434. This ground of demurre,r is overruled. . ;..'l'he second ground is that .the peti.tion shows the. plaintiffs'cause of accrued mor.e. thant}Vo, years. before the commencement ther1forebaQe4 ,by section 3227, Rev. St. The bar Qf a of limita-tl<>n mllY rai/3ed by demurrer when thElre is nO,6JtceptlOOtq the statqte, and petitionl!howsthe bar of the statute cOm:plete.Bank v. 72.;,.JJank '/.Oarpenter,101 U. S. 561j Turneui 2 Bush, 555; Ohile$ v.Drar.e,2!v.(etc. U6·. , In eases like this one, there 'can be no doubt this, as the actiopiS rel[l.lly statutory remedy, and. an in.direct action against the United nOminally against a collector for the recovery of taxes collected 9Y hixn·..Tpe appeal of .the of revenue to refund taxes illegally assessed and collected, and then a suit withlrl, the time provided by the statute, if$a conditl';>u precedent. The iQ di!jc\LSl!ing subject, lays .qown rule: . " 4-n allowance .by. the com this class of eases is not the silpple p¥sing cif an ordi",,,rYc1a\m by an ordinary accounting .officer, but a statementof accounts byone IlliyiI1g authority for that purpose, under an act of congre!l8. Until.an taken to the commissitmer, no Buit whatever can be miLiDtainet1 to< recover back taxes illegally assessed or erroneouRly paid. If oli. the appeal the claim is. rejected, anactioD lies. ,against the collector, (Rev. St. § 3226,) and through him, on establishing.. the error or illegality, a rerecovery can be had. If the Cilaim is allOWed, andpaYllleut for, any suit may be Qrought hi the court of claims.', 1:li1s, as it ,seems to us, is the logical result o1'the legislation of corig'ressupon tbe subject." U. Bartk. ·11>4 U. 8. 784;'·· . . .
of
's.".
An ;action like this one is not a commpn-Iaw action for money had and and regulated by ,statute.. See sections received, but is remedy 3226-3228, Rev. St., and Oheatam v.[f. S., 92 U. S. 85j Hu;k8,,110 .U. S. '272,4 Sup:Ct. 6; Arn8cm v. Murphy, 109JJ. S. 3 Sup. ,Ct. Rep. 184, 115 q. S. 584, 6 Sup. Ct. Rep. 185;Savingalnat. v.Bk"ir, 116 ,U.S. 200, 6 Sup. Ct. Rep. 353. . The Ingenious argPUlenUn t4e ablE:' brief of the counsel for the Vlllintiff, toprpve. that· the. Hniitation of the. statute as 1p the time of bringing suit does not appl,y, is not convincing., because;llts. we have seen,tlie re,Dled'y.they are pressing is astl!.t'utory one,given by. which Unjte,d is a suit against ll. ;co1,Tllis Jl1tnegY. IS gIven oply when fo1l9wed, WheB-i suH is ·. 1p act, III ,of
536
FEDERAL REPORTER,
vol. 48.
eveD a state of this'Uriion, much less a city. Thestlltutory remedy must be pursued as granted bycoD!!,ress, else there is no right of action. But if this actioD was a common-law one, for money had and received, we think the bar of the statute of limitation would apply to the plaintiffs' action, if nothing else appeared; Assuming that the holding of stock in the Louisville & Nashville Railroad Company by the city of Louisville is not merely a private property right, but is a ,public right, and is the exercise of governmental power!! pertaining to sovereignty, the maxim, nullwm ifMtpU8 occurrit regi, is This maxim' is applied only totbe sovereign or' government that has enacted the limitation act. IffOreign nations, subjects or citizens thereof, or municipalities deriving their'pQwer from a country other than that which has the act of limita" tion, 'seek the tribunalllof the latter coUntry, they are not entitled to apply ,this maxim, and will from the limitation, unless the'itct cif limitation excepts terms. The states of thfs Union, as between each other,or as between ,them and the United States, are not excepted from acts as to bringing suits, by the application ()f this maxim. 'The, plaintiffs' claims'las set out ih the petition, are barred by the statnte; :unless the a,ct Of' June 16; 1890, has prevented the bar. If this actioriwlfs one against,the defendants individually for money had and re6eived' for their use, the act of JUlie, 1890, would not, we think, prevent the running of th'e'limitation. But we have seen that it is, in effect, a statutory aetion' against the United States;, indirectly to adjudicate' arid ascertain t1,e amount duevhiintiff. In this' view;" I am of the opi*ion the bar of the statute is,lifted,!1s to the claim cQvered by this act., ,It may be urgeq baJ;of tp.e statute as to t4e time of presenting the arppeal, undel'section 8226, is all that is lifted by this act; but the act should be liberally construed and applied to section 3227, as well as section 3226.' 1'hls'act requires of board of sinking fund commissioners. of city of to be and adJllsted; and the inquiry 'is, what is that claim? 'The act itself answers the inquiry, and describes it as being "for inteI'Il.al revenue taxes on dividends on shares of stock owned by said board for said city ofLouisville in the Louisville & Nashville Railroad CompanY"to the extent that such taxes were deducted from any dividends due and payable to said board." Thus, to come within the description, plaintiffs' claim must be for taxes on dividends on shares of stock owned by plainti,ff, and which were deducted from said dividends. 'rhe taxes paid by the Louisville & Nashville Railroad Company OD its gross receipts, under section 103 of the act of June 30, 1864, are not, by any possible constrUction of this law,a tax on dividends owned by plaintiff, and fromwpich the tax was deducted. The tax was upon all of the receipts oithe railroad company, without regard to their source or use, and is in' no s¢nse a tax on a dividend on stock owned by plaintifts. "Dividend"is'defined by Webater thus: "A sum divided; a divisioD; a part or share made by division; the percentage divided; applied in casas of the pro rata division of assets among cred.
COMMISSIONERS OF THE SINKING FUND OF LOUISVILLE lJ. BUCKNER.
537
itors, or profits among stockholders." A cash dividend in corporation law is, we think, a uivisionmade between stockholders by the legal authority in the corporation of a part of the assets of the corporation, usually out of its profits, by which the stockholders become, and the corporation ceases to be, the owner of so much of its assets thus divided. A stock dividend is unlike a cash dividend, iu that the aSilets of the corporation are not diVided, or the property therein changed, but the stock is increased and divided, andth"e separate holdings of the stockholders increased to the extent of the dividend declared. Neither is the surplus or profits of the Louisville & Nashville Railroad Company, which were undivided, a "diVidend," within the meaning of this act of June 16, 1890. They were assets belonging to that company, and did not belong to the· stockholders until made their separate property by a division mllde by the proper corporate authority in the shape of a dividend. This was not done; hence this surplus was not a dividend, nor was the tax on it a taxon a dividend. The allegation of the petition that this surplus or profits were undivided dividends does not make this surplus dividends, within the meaning of the act of 1890. Neither the gross receipts or the undivided profits of the Louisville & Nashville Railroad Company taxed, are within the description of claim of plaintiffs which was to be audited and adjusted under this act. If we were allowed to consider the reason why the act confined the plaintiffs' claim to dividends on stockout of which the taxes had been deducted, it might perhaps be found in the fact that these were the only taxes the city directly paid. The ;other taxes were assessed and paid by the Louisville & Nashville Railroad Company on its own property, and not upon property belonging to the city, as between it and the city. The taxes under section 122 of the act of Jurie 30, 1864, was upon income. In the one instance, it was uRon the income of the city, and in the other upon the pf the rallrpad company from its profits which remained. undivided.The reas611ing of t!:le court iIi U., S. v. Railroad 00., 17 Wall. 324, recognizes this distinction;, hence held the tax'illegal in that case. But, whatever may have been the reason for thus confining plaintiffs' claim to (>De f6rtaxes paid on dividends, we think the construction given the· act by us is certainly correct. , The only remaining question is that of interest on the $9,494.72 from May 9, 1872. This sum nas been refunded without'interest. and plaintiffs claim they demanded it of the secretary and commissioner, and it was refused. in 1890. This claim must be considered as one against the United States, because, if it be regarded as one against the collector individually. it cannot be sustnined at all. There, is no allegation to take it out of the bar of the statute of limitation as aclailll against the collector individually. The act of June, 1890, provides that the secretary of the treasury and commissioner of internal revenue are "to pass upon said claim, and render judgment thereon, in the same manner and with the sanie effect as if said claim had been presented and prosecuted within the time limited andfi·xed by law." All rigM of action against Buckner individually, if the ever hadapy, was abso-
538
hlDERAL
REPORTER,
1ute1y barred by of limitation; and clearly these words do not -1'esoore .the right.. '. Congress may· have' aUih.ority to enact such l1; law, but this()ne isevidentlycintended to lift 'only the bllr of the statute as tc> tga United States. It would require clearand explicit language to make Buckner personally liable for a claim from which he was already freed by the bar of the statute of limitation. Indeed. Buckner would not be persori811y lia.ble for these taxes, for another reaSOD, and thl1t is, there was rio protest or objection made to his collection of them. The allegation is that these taxes were paid by the Louisville & Nashville Railroad Company without the knOwledge or consent of the plaintiffs, but there is none that the railroad company protested or objected to their collection or payment. ;Thequestion of inrerest,asa,claim against the United is one not free from. and I have read with much pleasureand ehlightenment the brief of the learned counsel upon this sub, ject.Itis; however, not in point to show that .recognized writers upon infernationallawdeclare! that interest is demandable between nations, nor t.hat the United Statesand other·nations .have demanded and received interest in Certain Cases of compensation for injuries done their subjects or citizens,' The city of Louisville, as well as the state of Kentucky, is apart of.the United States, and I presume the rule as to the payment of interest is: the same between ,the'United States and the city of Louisville as that: between the United States and any citizen. The rule is sta.ted thus in U. S. v. Bayard, 127 U.S. 260, 8 Sup. Ct.
1156, viz.:
"The case, therefore, falls within thE' well-settled principle that the United States are not liable to pay interest on claIms against them. in the absence of provision to that effect. It has been established as a genexpress eral rule in the practice of the government that interest is not allowed on claims Ilgainstit, whether contract.or in tort; whether 1>4sinessof adp1inistration, W.· nn.der private acts of they arise in .the congress on. special app);Ication. The only recognized I1xceptions llre.wbere the government stipulate,ilto pay intetest, and whf.'re interest is given,expressly by an act'ofcongres8,''eithl!r hythe name of interest, or by that of damages. ... III · 'Not oolyi8' this the general· principle and settled rtlleof tbe depaftmelit:oUhegovernmE'nt,but it has been the rule of the legislative department, congrps.s"though well knowing at the trel¥lury, invitf'd to change it. has refused t() Pl\8S any general for and payment of interest 011 claims against the government."" , , , See,111so; Pill80n v. m;8L,.lOO U;S.i 43; HarveJlv. U. 8.,.113 U. S, 243, 5 Sup. Ct. Rep. 465.' .,' The inquiry whether congress has .by an act, either general.or special, givenot'a:llowed interf:j8t on clairils whichtnay be allowed under sec:tion3220.· That section>authorizes the internal revenue; ,undersuch regulations as may be, prescribed by the secretary of the treasury, to refundand:paybackall taxes erroneously or illegally f1,Ssessedol'colleeted,and"all penaltiesioollected without authority, and alsc> to repay any colleewr the 'fulliaDrountof such surnsof money that may be recovered agai'nsti'him any icoprt for any internal taxes col-
is
COMYISSIONERS OF
stNlq!i'G
t7. BUCXNlm.
639
lllctedby him, with ,the'coat aQd expepseaofl>uit, butiasUent as to interest. Section 989 provides t4llt,when a recoy,ery;iahad against a co17 lec1ol'.' or other officer .of .for .aQ.Y done by him, 01' for any money paid to him, and by him pai.d into ,the treasury, in the of hi$' 'official duty, and the· certifies thatth",re was cause forllie act done by the' c()llectOT or other officer; noexecution shall issue against such collector or other but the llmount shall,upon final judgment, be provided for and paidout of th:e proper appropriation from the treasury. But the section is silent as ,to irterest, either before or after permanent apprO;; ',Ito refttl1d and pay backdutieserroneonsly or meor collected under the reventlelaws." Rev. St. p., ,§ 3689. This sect.ion is silent ail 9n money refundea .. Section 1090 provides that for·taxes illegally or "no' interest shall be allowed·on any claim up to the time of the rendition6f judgment thereon by the court of claims, unless upon a contract expressly stipulating for the paymentoH:nterest." This, of course, does Mt bind this court, but it, does show a general legislative intent not to allow interest on claims, in the absence of an express contract to do so, , or an express provision ofastatute. The supreme court has decided, in considering the effect of a certificateof'IJ'l'obable cause, under section 989, that such a certificate practicallY'converts the claim into a cl8im against the government, "but not U. S. 567. The court was construuntil then." U. S.v. Sherman, ingsection 989, but this does not apply to section 3220, as to the necessity for such a' certificate. The court, in a subsequent case, decided that the commissioner of ,internal revenue might, under section 3220, pay a judgment rendered against a.collectordirectly to the plaintiff, who recovered the judgment against him, nnd that, too, when the.trial had refused a certificate of probable cause. U. S. v. Frerich8. 124 U. S. 315, 8'Sup. Ct. Rep. 514. The counsel refer us to several decisions which thecy claim sustain plaintiff's right to interest. These will be briefly considered. The cases of Durand v. Lawrence and Bheimer v. Memvell,.2 Blatchf. 399, .and 3 :Blatc!J.f. 124, were custom$ duties, and they were decided in 1852 and 1853. In both cases the importers protested. The case of White v. Ar- . thwr, 10 Fed. Rep. 81, waa also a customs duty case, and the question was whether the judgment for customs duties which had been illegally exacted should bear interest after rendition until paid. The United states. had paid the/imount of the judgment, but declined to pay interest froIl) the rendition of the judgment until payment, although thflre had been a certificate of probable cause given by the court at the time of the judgment. The court decided the United States was not bOUnd to pay the interest on the judgment, and ordered a satisli:wtion of the judgment to be entered upon the motion of the United States. I do not understand that tbe court, intimated .an opinion that taxes illegally collected bore interest ,from· the time of their exaction. The case of U. S.v.:McKee, 91 a revolutionary claim, and the question
FEnERAL BlllPOB1'EB. voL 48.
W8.s'asto'the pl'Qper construction of' 8 special '8ct of congress allowing tbie claim. ' The claim Was referredtcfthe court of claims"':'"Wlth'fuUjbrisdlctlon to adjustan(l settle the sarne, and, in making such adjulltmentand settlement, the said cOUl'tshall be governed by the rules and regUlations heretofore adopted by the United State/! in the settlem ent of like casesqrivingproper consideration to qftlcial if any ha\'e heretofore been had with this claim. and without regard to the statute of limitation." The court of claims allowed and the supreme court affirmed the decision. ,The court says: of the act of p,1790, already to, directed the commissioners, who under that act were to settle the claims of the states against the govern,ment, to allow interest, and, but tor the bal' ot time in th..t act, this case 'would have come under that statute. .The act under which the court of claims took jurisdiction of this case directed it to be ·governed by the rules and regUlations beretofore adopted by the United States in theilettlernent of like cases.' , The is aJike case to those in which interest was to be allowed by the act of , We thihk there is nothing. in that case which throws any light on the question of .interest in· this case. The case of Bartels v. Redfield, 23 Blatchf. 486, 27 Fed. Rep. 286. also reported in 16 Fed. Rep. 336, was whereajudginent in the nature of special verdict was by consent entered for interestoh taxes (customs) ,illegally exacted, and the effort was made many years thereafter to set it aside. This motion rather indicates that; but for thecollilent order., no interest would be allowed, though the court did nO,tcbrisidel' that question. 'fhe supreme court, however, in a similar case,'against Redfield; refused to allow interest on a special verdict of like there had been a delay of many years in bringing the case tofitutljudgll1ent. Iron Co.,·1l0,U.S. 174, 3 Sup. Ot. 5'10." ,: , 'fheease<of19rskine v. Van Arsdale, ,15 Wall. 75; is impor,tant, and, a$ far as it degides, is very much in point. There the lower court inthat-, , .' : "If 'the officer the time, of payment, from the taxed person, thalthe tax wRsillegal, arid that he would take measures to recover it back, the action may be ml\intainedfl'lr,all the taxes paid; and that if tbey found forplaintijfthey wight add illterest." ' .Both instructions were sustained by thestlpreme court. Ohief Justice OHASE, delivering the opinion,said:, "TaxesillegaJlyJaIllsessed and paid mayalwaysl>e recovered back if the collector understands .'from the, payer the taxes are regarded as illegal, and that suit will be instituted for the refqnding thelll. . * * * The ground is tIle presumption that the govel'DmeJlt is for the refusal to allow always ready and willing' to pay its ordinary debts.. When an illegal tax has been collected, the citizen Who has paid it, and has been obligl'd to bring suit against the coUector, is, we think. entitled to interest in tbe event of recovery from thetlme of the illegal exaction." ,The court had previously decidEd that a person who voluntarily paid illegal taxes cbhld not recovefthem ftom the collector, but that if he paid such taxes under protest, or attha tfui'eof payment gave notice to the col.
COMMISSIONERS OF THE
FUND OF LOUISVILLE ". BUCKNER.
541
lector that he"intended to bring suit against him to test the validity of the tax, he could maintain an action of a88UmpBit against the collector. PhiladelphiD. v. Collector, 5 Wall. 732. The court, however, explained in Collector v. Hubbard, 12 Wall. 12, that this action of a88umpBit was not a common'-lawaction based upon an implied promise of the collector, because, if that was the fact, a good defense to it would be that the law required 'the taxes to be paid into the treasury of the United States, and that he had: paid them over in obedience to the law, but said this action, in form aB8UmpBit, was really a statutory remedy against the collector, to ascertain and determine the liability of the United States. We understand the .present law not to require a protest at the time of payment, but'an appeal to the commissioner of internal revenue will be sufficient. We, however, think thatrif the United States is liable for interest at all, it can only be from the time of a protest, if one is made, or from the refusal to' refund, after the appeal to the commissioner under section 3220. Any other rule would be. unjust. If the taxes are voluntarily paid, the United States is notin default in the repayment until a demand or ptorest. In the case a:t bar, the United States would not, in the absence of a statute of limitation, be in default as to the refunding of these taxes until a demand was made upon it to refund. Neither the United States nor its collector, Buckner, could be presumed to have known these taxes were illegally collected. The illegality depended upon the fact that the city of Louisville was a stockholder, and to that extent only was it illegal. The assessment and payment were both prima facie regular and legal, and, as far as this record shows; the United States has never been in default as to the refunding of these taxes. In the case of Bailey v. Railroad Co., 22 Wall. 604, and 106 U. S. 109, 1 Sup. Ot. Rep. 62, the w,xes w(,';re Haid und,erpt:otest, and after the railroad company's proP7 erty had been taken under distress warrants. In that case interest was time of payment. re New Yotlr- C. &: H. R. R. Co.; 6 Lawr. Dec. 131. I cannot find that the question of interest was considered'j)y the LAWRENCE, then comptrdller, seems subsequently to have protested vigorously against it when it was :00 late. to make the questi\>n. Ifweareoorrect in our view of the law, the only possible claim for inupon apt of 1890. That act .must not only have terest lifted the statute of limitation, but have conferred .the right to interest frOm thetirhe of the collection from the railroad company, or from two years aftef this collection. The language of this act is "to pass upon said claim, and render judgment thereon, in the same manner and with the same effect as if said claim had been presented and prosecuted within the time limited and fixed by law." The claim as described was for the taxes illegally collected, and the interest was an incident to the claim, if allowed; It would be compensation given for the use of the moneyor in the nature of damage for the delay in refunding it. But, cbnsideredas a claim, there was none at the time of the passage of the law, because the necessary steps had not. been taken. Congress must therefore ha:veintended merely to lift the bar of the statute
1>42 ,"
, FEDERAL REPORTER,
,vol. 48.
(ofl limitations,' -alid.allow: ,the claim:. as; described i in ,theaet .to .be passed :ti.ptin withthe'sameeffeet as .i{,it-,'had beeD presented 'withindthe time limitlid:;!ornot,'only to do this" 1>o:t\' in addition; to givd'plaintiff.s the right to; interest, which' they did: noM,hen ihave;ancJ could not there had been nabar ofthe statute It seems to,rne:.theproper'constructiomof ,the actisthateorigres8 only intended to prevent the: Bta.tuteof limitation·by. allowing :the Claim to' and paSsed. upon. with the same effect 8S if: there was no 8uch/statute.,and did not' intend inorease ,plaintiff&' by giving allemand ,made'in 1890 the'same e:lfect,:asto interest, as if it had been maqe! in 1872. ' IJ am the opinionthMthe law, as announcedin :Erskine v'.' Van ArBdale, 15 Wall. 7S, has been somewhat modified, astointereston taxes illegallY' ,by the hiter cases. See U.. S. ,v. Bnyard, 12'1 U.S .· 260;' v. Barna, 43>F-ed.Rep; 281. But, assuming {he law as laid down by Chief ticeCHASE is, unmodifioo, ,the plaintiffs cannot recov,er interest in this case, because they have, not taken the 'necessary steps to entitle them to it,.:and the act of June, 1890, has not:given it to them. We conclude, thetefore, thatdefendante' dcmuNermust be sustained to the entire claimandp.etition, and it is so
E. D. Vtrlltnta;Januarr, 1889.' --LnrITATIONll.
011 TAiBS:lLLEGALLY
OJ' CuIJIS
A for the refUllding al16Red. to have, ibeen illegally collected Willi MadEl to the CODlDiissioner of internal revenue upon tor;pl '1,7, pre!\cribed by the de'ptU'tment: for claims "for the remlsaionoftaxes impropel'ly assessed," instead of '. upon form 46, for claim I, "for taxe/! was, rejected. After II 'long delll.y. \laused,by losll'of paperS by the department, 11. was at. length presonted 'oaform.46, aupported by the prope1'ialidavits.Act Canll. July 18,1l:l66, c. 184, § 19, as amended by Act Congo June 6, 1872, c. 1l15, §.44; declarellt.hat no suit shall be maintained t9 ,recover taxes illegally co,ijected until olaim hIlS been made to the commisllioner 'and a decision had thereon, Or until tl1e decision has been delayed for more slx months; ImQ, that nosU,it WI1 be ,brought more than one year ,after hisdacisiOn. Held, that tbeclaim Willi not in shape for c:I,ecision on the merltll Un·.til th.e lallt. p.1 'esentation, ,and. the dellislon be.ing delayed .more .th.ail sbc .months, l .sllit could be brought, notwithstanding ,that ,more than a yesl' had elapsed since the .:firllt rej611tion. alld that tl1Ei'commissionel' refused to aot on 1;l1e ground that the :first rejeetionwas'llnaL " i
At LaW. Action by S.D. Hicks againf\t the administratrix of William James, deceased, to recover taxes alleged to have been illegally collected by him as United Statesinternahevenue co11ectol';at Richmond. Va. Upon, the subject of refunding taxes,. Act Congo July 13, 1866, c. 184, as,now embodied in Rev. St. U.S. § 3220, provides, among other thingsi'that "the commissioner of internal revenue, subject to regulations prescribed by the secretary of-the treasury ,is authorized, on appeal to hinlmade, to remit, refund,and: pay back all taxes erroneously