Opinion
No. H-494.
June 1, 1931.
Suit by the Crawford Mfg. Company, Inc., against the United States.
Judgment for plaintiff.
The plaintiff sues to recover the sum of $37,453.40, alleged to have been illegally and erroneously assessed and collected by the United States under the provisions of subdivision 3 of section 900 of the Revenue Act of 1921 ( 42 Stat. 291), and subdivision (3) of section 600 of the Revenue Act of 1924, 26 USCA § 881 note, on sales of top recovers, back curtains, wedge-shaped cushions, and seat and floor coverings, designed to be permanently attached, for the period from January, 1922, to February 26, 1926, both dates inclusive.
The issue involved is whether or not the articles in question constitute "parts" or "accessories" for automobiles within the meaning of the statute.
This case having been heard by the Court of Claims, the court, upon the report of a commissioner and the evidence, makes the following special findings of fact:
1. The plaintiff is, and at all times mentioned herein has been, a corporation organized, existing, and doing business under and by virtue of the laws of the state of Virginia, with its office and principal place of business located at Richmond, Va.
2. During the years involved herein the plaintiff was engaged in the manufacture and sale of automobile fabric accessories. The several articles manufactured and/or sold by it include top recovers for open cars, curtains for open cars, seat covers for open and inclosed cars, wedge-shaped back rest cushions, carpets for closed cars, tire covers, side curtains for open cars, seat cushions, one-man tops, top protector pads, roof coverings for inclosed cars, cushion recovers, side and rear curtains for inclosed cars, door grips, welt gimp, trimmer's tacks, upholstery nails, hood and radiator covers, and pedal mats.
3. The plaintiff made and filed its manufacturer's excise tax returns monthly for the period of January, 1922, to February, 1926, inclusive, showing the amount of tax due thereon which was duly assessed on such returns by the Commissioner of Internal Revenue. By monthly payments beginning with a payment of $1,102.07 made on February 28, 1922, for the month of January, 1922, and ending with a payment of $528.89 made on March 25, 1926, for the month of February, 1926, the plaintiff paid the United States manufacturer's excise taxes in the aggregate sum of $75,097.23 under section 900, subdivision (3) of the Revenue Acts of 1918 and 1921, respectively, on the sale of certain of the articles manufactured by it.
4. On February 24, 1926, the plaintiff filed with the collector of internal revenue for the district of Virginia its claim for refund of manufacturer's excise taxes in the amount of $9,937.36 paid for the period from January 1, 1922, to December 31, 1922, alleging that the amount claimed was illegally collected by the United States on sales of top recovers, back curtains, and wedge cushions. Eight thousand three hundred twelve dollars and eighty-eight cents ($8,312.88) of the said amount was alleged to have been paid upon top recovers, $1,432.99 upon back curtains, and $191.49 on the wedge cushions. It was contended by the plaintiff in its claim for refund that the said articles and materials were not "parts or accessories for automobiles" within the meaning of the law. This claim was wholly disallowed by a letter from the Commissioner of Internal Revenue, dated July 29, 1926.
5. On April 14, 1926, the plaintiff filed with the collector of internal revenue for the district of Virginia its claim for refund of manufacturer's excise taxes in the amount of $27,489.08 paid for the period from January 1, 1925, to February 26, 1926, alleging that the amount claimed was illegally collected by the United States on the sale of top recovers, back curtains, seat covers, and carpets designed to be permanently attached, wedge cushions, and deck coverings material for closed cars. Twenty-one thousand nine hundred twenty-nine dollars and fourteen cents $21,929.14) of the said amount was alleged to have been paid upon top recovers, $3,307.51 upon back curtains, $762.75 upon wedge cushions, $806.27 upon permanently attached seat covers, $610.67 upon floor coverings, and $72.74 upon deck coverings for closed cars. It was contended by the plaintiff in its claim for refund that the said articles and materials were not "parts or accessories for automobiles" within the meaning of the law. On August 19, 1926, the Commissioner of Internal Revenue allowed $72.74 of the said claim as the amount erroneously paid on nontaxable sales of deck coverings for closed cars and rejected said claim as to the balance thereof in the sum of $27,416.34.
6. The top recovers hereinbefore referred to are composed of three separate pieces of top material. These pieces are commonly designated as the top deck and the side quarters. The top recovers involved in this suit were manufactured and sold with the top deck double stitched to the side quarters and with the exposed edges of the side quarters re-enforced by being turned in and double stitched to form a hem. The ends are left unfinished in order that they may be attached to the top frame. The rear curtains are comprised of a piece of properly shaped top material with either a celluloid or plain or beveled glass window securely attached. As in the case of the top recovers, the side edges are re-enforced by being turned in and double stitched, and the ends are left unfinished. The top recovers and rear curtains are cut in dimensions to meet the requirements of various makes and models of automobiles. The top recovers and rear curtains are frequently sold together, and, when so sold, the necessary tacks and binding materials are furnished. As is implied by the use of the name, the recovers and the rear curtains are sold to be used for the replacement of similar parts or materials rather than used in the construction and equipment of new automobiles. The wedge-shaped cushions are covered with top or seat covering materials or of corduroy or other cloth, and are stuffed with cotton batts. The edges of the cushions are secured and protected with a welt binding. They are advertised in the plaintiff's catalogue as being suitable for use in canoes and in swings, and by campers and tourists. They are suitable for use wherever a back-rest cushion of that type is required. The floor coverings and seat covers are cut in dimensions to meet the requirements of various makes and models of automobiles. The edges of the floor coverings are bound. The edges of the seat covers are hemmed. The floor coverings and the seat covers may be attached either by the use of tacks or by the use of glove fasteners. With the exception of some small sales of the wedge-shaped cushions made to sporting goods houses, the products of the plaintiff were sold and distributed through jobbers and mail order houses.
7. The top recovers, back curtains, permanently attached seat covers, and floor coverings, hereinabove referred to and described, were primarily adapted for use in motor vehicles. The wedge-shaped cushions were not primarily adapted for use in motor vehicles.
Upon the foregoing findings of fact which are made a part of the judgment herein, the court decides as a conclusion of law that the plaintiff is entitled to recover $954.24.
It is therefore adjudged and ordered that plaintiff recover of and from the United States the sum of nine hundred fifty-four dollars and twenty-four cents ($954.24), with interest at the rate of 6 per cent. per annum on $191.49 thereof from December 31, 1922, and on $762.75 thereof from February 26, 1926, to such date as the Commissioner of Internal Revenue may determine, in accordance with the provisions of subsection (b), section 177, of the Judicial Code (28 USCA § 284(b), being a part of the Revenue Act of May, 1928 ( 45 Stat. 877, § 615(a).
George M. Wilmeth, of Washington, D.C., for plaintiff.
Ralph C. Williamson, of Washington, D.C., and Charles B. Rugg, Asst. Atty. Gen., for the United States.
Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
See Atwater Kent Mfg. Co. v. United States, 62 Ct. Cl. 419; Advance Automobile Accessories Corp. v. United States, 66 Ct. Cl. 304; Borg Beck Co. v. United States, 67 Ct. Cl. 242; Cuno Engineering Corp. v. United States, 43 F.2d 259, 70 Ct. Cl. 384, and Universal Battery Co. v. United States, 281 U.S. 580, 50 S. Ct. 422, 74 L. Ed. 1051.