Summary
In Mattingly et al. v. Smith Milling Co. (1938), 183 Miss. 505, 184 So. 635, the Court held that the buyers of flour were not entitled to recover from the seller the amount added to the purchase price by the seller to meet the processing tax imposed by the Agricultural Adjustment Act which had been declared unconstitutional, where the flour had been sold at a flat price per barrel and the tax had been indistinguishably incorporated into the total sales price.
Summary of this case from Mississippi State Tax Comm. v. Southern BellOpinion
No. 33323.
November 28, 1938.
1. SALES.
The buyers of flour were not entitled to recover from seller amount added to purchase price by seller to meet processing tax imposed by Agricultural Adjustment Act which had been declared unconstitutional, where flour had been sold at a flat price per barrel and tax had been indistinguishably incorporated into total sales price (Agricultural Adjustment Act, 7 U.S.C.A., sec. 601 et seq.).
2. SALES.
Where tax item has been indistinguishably intermingled or absorbed in a total or composite stated price to be paid on delivery of purchased article, buyer is without remedy to recover it, even though annulment of tax may increase seller's profit.
3. SALES.
A buyer is not entitled to a drawback out of what would otherwise appear as a flat sales price unless express provision is made therefor in sales contract.
APPEAL from the circuit court of Forrest county; HON.W.J. PACK, Judge.
William Haralson and S.A. Hall, both of Hattiesburg, for appellants.
It appears that the following propositions are established by the record. The Milling Company paid the process tax required by the Federal Government. The Milling Company has filed claim for refund of the tax which was declared invalid. This tax was passed on to the Bakery Company. The Bakery Company did not increase its price, nor pass the tax burden on to the consumer. We are thus confronted with this question. Should the Milling Company be permitted to keep this refund, or should it be required to disgorge it to the Bakery Company?
Illustrating the principle involved here, that of recovering money had and received, we find our own Supreme Court has the following to say: "The question presented is, whether the plaintiffs have a remedy at law, or whether they must seek relief in equity." This case was tried in the circuit court of Monroe county. The holding of the appellate court was that the law will imply a promise to pay money received by one person, to which another has a clear right in equity.
Legard v. Gholson, 24 Miss. 691.
It is to be recalled that this Agricultural Adjustment Act, of May 12, 1933, Title 1, 48 Stat. 31 (see 7 U.S.C.A.) on January 6, 1936, was held void in the case of U.S. v. Butler, 297 U.S. 1, 56 S.Ct. 312, 80 L.Ed. 477, 102 A.L.R. 914.
Not only was the act declared void, but later on procedure was set up to facilitate collection of the tax unlawfully exacted from the Milling Company and others. The method prescribed was declared to be adequate in the case of Anniston Mfg. Co., Petitioners v. Harwell G. Davis, Collector of Internal Revenue, U.S. Supreme Court Report, 81 L.Ed. 1143, 301 U.S. 337.
It is thus evident that the Milling Company has a clear path to reimbursement for the tax it paid. Should it be enriched at the expense of the Bakery Company? We submit that neither in law nor in equity should an injustice be permitted. For all of which reasons we solicit this court to reverse the judgment of the lower court and enter judgment here for the Bakery Company, the appellants, in the sum of $1662.90, the amount for which judgment was demanded in the set-off filed by the Bakery Company.
George W. Currie, of Hattiesburg, William H. Oppenheimer and Montreville J. Brown, both of St. Paul, Minn., for appellee.
Assuming for the sake of argument that processing taxes or some part thereof were added to the price, there can be no recovery on behalf of defendants because there was no contract that the same would be returned to defendants in the event of the invalidation of the AAA, and because the taxes were absorbed in total or composite prices, to be paid by the defendants at all events.
There were no contract provisions as to processing taxes and, therefore, no right to recover on the theory of express contract.
If processing taxes were included in the prices, they were absorbed in total or composite prices to be paid at all events, and, as a consequence, defendants are without right to recover.
Wayne County Produce Co. v. Duffy-Mott Co., 244 N.Y. 351, 155 N.E. 669; Heckman Co. v. Dawes Son Co., 12 F.2d 154; Texas Co. v. Harold, 228 Ala. 350, 153 So. 442, 99 A.L.R. 523; Casey Jones, Inc. v. Texas Textile Mills, Inc., 87 F.2d 454; Zinsmaster Baking Co. v. Commander Milling Co., 273 N.W. 673.
In quite a number of the cases involving the question presented in the case at bar, the courts call attention to the following language of Mr. Justice Holmes in the case of Lash's Products Co. v. United States, 278 U.S. 175, 73 L.Ed. 251: "The phrase `passing the tax' is inaccurate, as obviously the tax is laid and remains on the manufacturer and on him alone. Heckman Company v. I.S. Dawes Son Co., 56 App. D.C. 213, 12 F.2d 154. The purchaser does not pay the tax. He pays or may pay the seller more for the goods because of the seller's obligation, but that is all. . . . The price is the total sum paid for the goods. The amount added because of the tax is paid to get the goods and for nothing else."
Abe Cohen v. Swift Co., 95 F.2d 131; Heckman Co. v. Dawes Co., 12 F.2d 154; Moore v. Des Arts, 1 N.Y. 59; Kastner v. Duffy-Mott Co., Inc., 125 Misc. 886, 213 N.Y.S. 128; Christopher Hoger Co., 166 Misc. 21, 289 N.Y.S. 105; Acme-Evans Co. v. Smith, 13 F. Supp. 356; Cupples Co. v. Mooney Co., 25 S.W.2d 125; Lucas v. Panos, 68 P.2d 617; Johnson v. Iglehart Bros., Inc., 95 F.2d 4.
Right to recover cannot be predicated on the theory of money had and received or unjust enrichment.
Johnson v. Iglehart Bros., Inc., 95 F.2d 4.
Counsel for appellant admits that the milling company paid the processing tax required by the Federal Government, and the record demonstrates that the milling company never received a refund or a return of any of the processing tax. It is manifest from the record as well as from the finding of the lower court that the defendants had nothing to do with payment of the processing tax, and that it was not passed on to the bakery company.
At intervals during the year 1934, appellants purchased from appellee an aggregate of 1205 barrels of flour. A processing tax of $1.38 per barrel, amounting to a total of $1662.90, was imposed under the so-called Agricultural Adjustment Act, 7 U.S.C.A. section 601 et seq., and was paid by appellee to the federal government. After that Act was declared unconstitutional, appellee filed its claim for the recovery of the processing tax so paid, but no part thereof has been refunded to appellee.
Appellants made several remittances on the purchases but failed to pay a balance of $341.50, for which balance appellee instituted its action at law. Appellants filed a set-off for the said sum of $1662.90, averring that appellee had wrongfully added that amount to the sales price of the flour, and was liable to appellants as for money had and received. On the trial, the court disallowed the set-off, and this appeal is taken from that action.
The record shows that all the flour was sold to appellants at a flat or total or composite stated price per barrel, not at a certain price per barrel, plus the processing tax of $1.38. In so far as the tax may have been taken into consideration at all in fixing the sales price, it was indistinguishably incorporated into, and absorbed along with, all the other items of cost or expense which went to make up the total sales price per barrel; and it is now thoroughly well settled that when the tax item or any other item has been indistinguishably intermingled or absorbed in a total or composite stated price to be paid on delivery of the purchased article, the buyer is without remedy, though the annulment of the tax may increase the profit of the seller.
The result in such a case is the same as if the seller in fixing his delivery sales price had calculated the cost of wheat to him at $1.50 per bushel, and it later turned out that he got the wheat at $1 a bushel. When the buyer would claim a draw-back out of what would otherwise appear as a flat sales price, he must see to it that his right to such a claim is expressly made a part of the contract, — failing in which the court cannot insert such a provision for him. Wayne County Produce Co. v. Duffy-Mott Co., 244 N.Y. 351, 155 N.E. 669; Heckman Co. v. I.S. Dawes Son Co., 56 App. D.C. 213, 12 F.2d 154; Texas Co. v. Harold, 228 Ala. 350, 153 So. 442, 92 A.L.R. 523; Golding Bros. Co. v. Dumaine, 1 Cir., 93 F.2d 162, 115 A.L.R. 664; Zinsmaster Baking Co. v. Commander Milling Co., 200 Minn. 128, 273 N.W. 673; Cohen v. Swift Co., 7 Cir., 95 F.2d 131, and many others.
Affirmed.