Opinion
This case having been heard by the Court of Claims, the court, upon the evidence adduced, makes the following special findings of fact:
The plaintiff is a corporation and on May 15, 1920, filed its income tax and excess profits tax return for the year 1919 and duly paid the taxes shown to be due thereon in the amount of $131,137.27. On November 13,1923, it filed a claim for refund of all the tax so paid. After an audit and review of the plaintiff's income and profits tax returns for the years 1917 to 1920, inclusive, the Commissioner, by a letter dated December 7, 1923, notified plaintiff of his determination, which was as follows:
Year:
Additional tax
Overassessment
1917 ................
$24,399.80
1918 .................
22,247.62
1919 ...............................
$ 97,343.07
1920 .................................
37,120.90
------------
--------------
Total............
$46,647.42
$134,463.97
Net overassessment .................
$ 87,816.55
February 7, 1924, the Commissioner signed an assessment list showing additional assessments against plaintiff of $24,399.80 for 1917 and $22,247.62 for 1918, with directions to the collector to withhold demand pending comparison with schedule of overassessments and notations thereon, meaning that the additional assessments had been made as set forth in the Commissioner's letter to plaintiff of December 7, 1923.
February 11, 1924, the Commissioner signed a schedule of overassessments showing overassessments in favor of plaintiff of $97,343.07 for 1919 and $37,120.90 for 1920 with the notation thereon "368-M cases" and directions to the collector that no part of this overassessment would be certified for refund pending the receipt of the next assessment list which would carry additional taxes against the taxpayer in the amount of the additional assessments above stated. The collector complied with the directions of the Commissioner, and, after making notations on his books accordingly, prepared a schedule of refunds and credits disclosing that the overassessment for the year 1919 was an overpayment, and that $24,399.80 was a credit against the additional tax for 1917 referred to above, $22,247.62 was shown as a credit against the additional tax for 1918, and the balance of $50,695.65 was shown to be refundable. This schedule or refunds and credits also disclosed the fact that the full amount of the assessment for the year 1920 was an overpayment to be refunded. The schedule was forwarded by the collector to the Commissioner and signed by the Commissioner May 28, 1924.
Previous to this action by the collector, plaintiff was advised March 18,1924, that claims for refund for 1917 and 1918 previously filed would be rejected for the reason that an audit of the returns disclosed for each of the years involved a tax liability in excess of the amount assessed. The plaintiff replied calling attention to the fact that claims for refund for the year 1920 had been filed and that the Commissioner's audit of December 7, 1923, gave formal notice of overassessments of the years 1919 and 1920 which overassessments more than offset any additional assessment that could be made for the years 1917 and 1918. The Commissioner answered that certificates of overassessment were being prepared and would be sent to the collector and the amount thereof applied in accordance with law. Further, on April 23,1924, the plaintiff was advised by the Commissioner that
"Any part of the overassessment which had not been paid will be abated; any portion thereof which has been paid will be credited to tax due the Government for other years, and the balance, if any, will be refunded through this office by Treasury check."
April 25, 1924, plaintiff's attorney sent a letter to the collector setting out the additional taxes and overassessments and showing a balance in favor of plaintiff of $87,816.55, and stating, in substance, that this amount should be refunded.
After some more correspondence in which plaintiff requested prompt adjustment of its account upon receipt by the Commissioner of the schedules from the collector, the Treasury Department issued a check for the amount found to be refundable, as shown by the schedule of refunds and credits signed by the Commissioner May 28, 1924, being $50,695.65 for 1919 and $37,120.90 for 1920, making a total of $87,816.55 in favor of plaintiff, which was sent to it by check together with certificates of the overassessment for 1919 and 1920, showing how the overassessments had been applied and the amount found to be refundable was computed, as to which the plaintiff was fully advised in detail. Subsequently the balance of the account between plaintiff and defendant for interest as computed by defendant in accordance with the manner in which the tax adjustments had been made as aforesaid was paid to plaintiff.
November 16, 1928, the plaintiff addressed a communication to the Commissioner in which it urged that the part of the 1919 overpayment ($24,399.80) which had been credited against additional tax for 1917 should be refunded to it for the reason that such amount had been credited after the expiration of the period for the collection of the 1917 tax.
There is nothing in the evidence showing or tending to show that defendant's officials promised or agreed to pay plaintiff anything whatever beyond the sum of $87,816.55 which was refunded and paid to the plaintiff. On the contrary, the evidence shows that a settlement was made with plaintiff in 1924 by the payment of this amount, that plaintiff accepted this sum and made no objection or further claim until more than four years later. M. Manning Marcus, of Washington, D.C. (Merrill S. June, of Worcester, Mass., on the brief), for plaintiff.
J.H. Sheppard, of Washington, D.C. and Frank J. Wideman, Asst. Atty. Gen. (G. H. Foster, of Washington, D.C., on the brief), for the United States.
Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
GREEN, Judge.
This case is one in which plaintiff brings suit on an account stated in the form of a certificate of overassessment, which showed that an overassessment had been made, that part of it was credited on additional taxes for other years and $87,816.55 refundable, which was accordingly paid to plaintiff and accepted by it without any complaint until some four years afterwards.
Instead of an account stated, these facts would seem to show an account settled when the refund was made and interest also paid. However this may be, it is quite evident that there was no account stated showing a balance in favor of plaintiff after the payment of the refund and that consequently no right of action accrued to plaintiff thereon. Under the rules laid down in the cases of R.H. Stearns Co. v. United States, 290 U.S.--,54 S.Ct.325, 78 L.Ed.--(decided January 8, 1934), Leisenring v. United States, 3 F.Supp. 853, BOOTH, Chief Justice, and WHALEY and WILLIAMS, Judges, concur.
LITTLETON, Judge, dissents.