Case ID: us-ct-cl_21/html/0007-01.html
Source: Caselaw Access Project
Author: {"author": "Davis, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JENKINS VAN SCHAICK et al. v. THE UNITED STATES.
    [No. 13613.
    Decided January 11, 1886.]
    
      On the Proofs.
    
    Claims of members of the New York Stock Exchange for taxes illegally collected are referred to the court by a special act as if not barred by the statute of limitations. But a proviso requires the claimants to show that they were parties to and relied upon an arrangement made with the attorney of the United States whereby it was understood and agreed that such claims should abide the event of certain test cases then pending.
    When a special statute, Act C>th June, 1872 (17 Stat. L., 257), authorizes the bringing of actions to recover back certain internal-revenue taxes illegally collected with a proviso that “ such claimants show that they were parties to and relied upon an arrangement made with the attorney representing the United States” “ whereby it was understood and agreed that such claims should abide the result” * * * of certain test cases, the question whether the claimants were parties to aud relied upon the arrangement is one of fact.
    
      
      The Reporters’ statement of the case:
    The following are the material facts found by the court which relate to the only issue involved in the case:
    The claimants, in common with the other members of the Stock Exchange, from whom moneys in like manner were collected, protested by themselves and their repres'entatives against the assessments and collections as illegal and unjust.
    , A committee of the Stock Exchange, representing all of the members of the exchange, including the claimants, was appointed to take care of the interests of the various.members in the matter and to arrange for a refund or recovery of the taxes in controversy. In pursuance of this purpose and plan, the committee of the exchange, with their counsel, in the spring and summer of 1869, had several meetings or consultations with the United States district attorney and his assistant in charge of internal-revenue matters for the southern district of New York. The result of these consultations and meetings was an understanding and agreement that there should be two test cases or suits brought and tried to determine the points in controversy between the revenue authorities and the claimants and others. Relying upon this arrangement, two suits or cases were at once commenced, under the authority and by the direction of the committee of the Stock Exchange, in the United States court in New York City. (Claris, Dodge & (Jo. v. Bailey, collector, and Frank Work v. Same.)
    
    These cases were, decided in the court below favorably" to the plaintiffs, and, upon appeal by the United States to the Supreme Court, were affirmed.
    The claimants, being members of the Stock Exchange, were parties to the arrangement made by the committee of the exchange with the attorney representing the United States in the test cases, whereby it was understood and agreed that all claims similiar to the two cases should abide their result-.
    
      Messrs. J. W. Douglass and Howard Cady for the claimants.
    
      Mr. Heber J. May for the defendants.
   Davis, J.,

delivered the opinion of the court :

Beginning in 1869 and ending in 1872 the collector of internal revenue in the thirty-second district of New York imposed and collected taxes, not only upon the fixed? capital of certain bankers and brokers, but also upon moneys borrowed by them from time to time for temporary use in the ordinary course of business. This was objected to, but payment of the taxes so assessed was enforced, whereupon two test cases were brought against the collector to secure the decision of the courts upon the correctness of his interpretation of the law (14 Stat. L., 136; id., 115).

Both these cases were decided adversely to the collector below, and upon appeal to the Supreme Court the judgments were affirmed (Bailey v. Clark, 21 Wallace, 284), October term, 1874.

When these actions were begun the claimants in this case and others of the same class reserved their rights until a judicial decision should be given, relying upon the fact that there existed no statute of limitations against claims of this nature, and the further fact, as they allege, that there was an understanding between them and the United States district attorney, made by a committee of the Stock Exchange rexiresenting all the members, that their claims should abide the judgment to be rendered in the Sux>reme Court. Meantime, however,. Congress passed the Act June 6,1872 (17 Stat. L., 257), which set up a limitation of one year against claims of this nature, so that when the test cases were decided the claimants'in this case and others similarly interested found themselves technically cut off from any remedy. Thereupon they appealed to Congress for relief, and the Judiciary Committee of the House of Be)jresent-atives in both the Forty-fifth and Forty-sixth Congresses reported in favor of a bill to refund the amounts in controversy in accordance with the decision in the test cases. Finally the Forty-seventh Congress sent the parties to this court for relief by the following Joint Resolution, January 24, 1883 (22 Stat. L., 635). “That the claims hereinafter described be, and the said claims are hereby, referred to the Court of Claims under the provisions of sections ten hundred and fifty-nine of the Ilevised Statutes, the same as though not barred by the statute of limitations, namely: The claims arising within the former thirty-second internal-revenue district of New York prior to June sixth, eighteen hundred and seventy-two, of those persons members of the Stock Exchange of the said city, from whom moneys were illegally collected, as subsequently shown by the decision of the Supreme Court in the cases of Bailey versus Clark, Dodge, and others (reported in twenty-first Wallace, page two hundred and eighty-six), where such claimants have not heretofore been repaid such moneys : Provided, Such claimants show that they were parties to, and relied upon, an arrangement made with the attorney representing the United States in said causes whereby it was understood and agreed that such claims should abide the result of said causes: And provided, further, That no action shall be maintained under this resolution which is not begun within a year from its passage, and the testimony of any witness otherwise competent shall not be excluded by reason of his interest in the issue thereof.” The claimants are therefore required to show that they were members of the New York Stock Exchange when the taxes were collected; that the claim arose within the former thirty-second district of New York; that they have not been repaid the moneys collected; but particularly (and it is here that the issue arose) that they were parties to and relied upon an arrangement made with the district attorney whereby it was understood and agreed that their claim should abide the result of the test cases.

The issue, therefore, presented no question of law, and as we have found the facts in favor of the claimants they are entitled to judgment in the sum of $6,433.49.