Opinion
No. J-541.
November 2, 1931.
Suit by the J.H. Neil Creamery Company, a corporation, against the United States.
Judgment dismissing the petition.
This case having been heard by the Court of Claims, the court, upon the evidence adduced, makes the following special findings of fact:
1. The J.H. Neil Creamery Company is now, and was during all of the times hereinafter mentioned, a corporation duly organized and existing under the laws of the state of Iowa, and engaged, among other things, in the manufacture of butter.
2. Prior to November 17, 1920, plaintiff had manufactured 10,980 pounds of butter, which butter was sold to a firm in Chicago, Ill., and stored by said firm in the North American Cold Storage House in Chicago.
3. Some time in the early part of November, 1920, said butter was inspected by a representative of the Internal Revenue Bureau, and on November 17, 1920, a collector of the Internal Revenue Department seized all of said butter, to wit, 10,980 pounds, as adulterated within the meaning of the Adulterated Butter Act of May 9, 1902 ( 32 Stat. 193), and Regulations 9 promulgated in pursuance thereof.
4. Following the seizure of the butter by the collector of internal revenue, plaintiff got in touch with the Revenue Department, and vigorously requested the return of the same. The collector of internal revenue refused to return the same until a stamp tax was paid. In order to obtain the release of the butter, plaintiff, on November 22, 1920, paid to the collector of internal revenue at Dubuque, Iowa, the stamp taxes on said butter as prescribed by the act of May 9, 1902, in the sum of $1,098. Following the payment of this amount, the butter was released by the collector of internal revenue.
5. Subsequent to the payment of the sum of $1,098 to the collector of internal revenue, plaintiff's representatives sent some letters to, and had some conferences with, the Commissioner of Internal Revenue and also with the collector of internal revenue at Dubuque, Iowa, with reference to the tax mentioned in the previous finding, also with reference to other taxes and penalties which had been collected from the plaintiff upon the ground that plaintiff had manufactured adulterated butter. The evidence is indefinite and uncertain as to what took place at these conferences, and there is no evidence whatever tending to show that any demand or request was made in any of these transactions for a refund or return of the stamp tax for the recovery of which this suit is brought.
6. On August 26, 1927, plaintiff filed with the collector of internal revenue at Dubuque, Iowa, a formal claim for refund of the said sum of $1,098; the same being the amount paid by plaintiff to the collector of internal revenue on November 22, 1920. This claim for refund was denied by the Commissioner of Internal Revenue, and no part of the same has been refunded to plaintiff. No other written claim for refund of this tax was offered in evidence, but a letter from the Commissioner dated November 30, 1927, rejecting the claim filed August 26, 1927, states that "a previous claim for the refunding of this tax was filed April 26, 1925, and rejected July 23, 1925, as barred by the statute of limitations."
Raymond M. Hudson, of Washington, D.C. (George W. Peterson, of St. Paul, Minn., on the brief), for plaintiff.
Joseph H. Sheppard, 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.
The evidence shows that the collector of internal revenue seized a quantity of butter belonging to plaintiff, claiming that it was adulterated under Regulations 9, defining the term adulterated butter as contained in the Act of May 9, 1902. This regulation fixed the standard of moisture for butter, and held that butter having a moisture content in excess thereof was adulterated.
In Lynch v. Tilden Produce Co., 265 U.S. 315, 44 S. Ct. 488, 68 L. Ed. 1034, the Supreme Court held that the law conferred upon the Treasury no authority to make such a regulation. In order to obtain a release of the butter from the seizure, plaintiff was obliged to pay a tax of $1,098 which had been assessed against the plaintiff on the ground that the butter was adulterated under the terms of the said regulation. As the regulation was void, the tax was wrongfully collected. No written claim for refund was filed herein until more than five years after the payment of the tax. In fact, the evidence fails to show that any kind of a demand or request was made for the payment or refund of the particular tax in suit until more than five years had elapsed after the payment thereof. Under the law and the Treasury regulations, it is clear that plaintiff's claim is barred, for the reason that it was not filed in time. It follows that plaintiff's petition must be dismissed, and it is so ordered.