Case ID: us-ct-cl_5/html/0441-01.html
Source: Caselaw Access Project
Author: {"author": "Peck, J., \n      Nott, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PORTLAND COMPANY’S CASE. The Portland Company v. The United States.
    
      On the Proofs.
    
    
      The claimant brings his action to recover a drawback, under the internal revenue act 3Oth June, 1864, (13 Stat. L.,p. 223, sec. 71,) upon four locomotives, exported 
      
      to Ganada, upon which an internal revenue tax had been paid. It apxmirs in evidence that the claim had been presented to the Internal Revenue Department, and rejected upon grounds not considered by this court.
    
    The Court of Claims has not jurisdiction of an action brought to recover a drawback under the Internal revenue act 30th June, 1864, (13 Stat. L., p. 223, sec. 71,) on manufactured articles, exported from the United States, upon which an internal revenue tax has been paid.
    
      Mr. George F. Talbot for tbe claimants:
    1. On September 19, 1865, tbe United States, owning six locomotives, (this being one,) exposed tbe same for sale in tbe city of Portland at public auction; and tbe claimants purchased tliem.
    Thereafter tbe claimants, on tbe 24th day of September, 1866, exported this locomotive from tbe United States, the-same never having been used. Three others were subsequently exported under like conditions', and drawback is now claimed on four; one only, however, needs specific treatment in this brief.
    An internal revenue tax amounting to $1,620 had been previously duly assessed upon the manufacturer of this locomotive, and by the manufacturer duly paid.
    A claim for the drawback of such tax was presented to the Commissioner of Internal Revenue prior to October 1,1868, and by him disallowed.
    The provision of law authorizing the allowance of drawback is to be found in the Act June 30, 1864, (13 Stat. L., sec. 171.) Drawback under the internal revenue acts is allowed to the exporter of an article upon which the tax had been paid, no matter how many changes of ownership may have intervened between him and the original tax-payer. The claimant rests his claim upon this plain meaning of the act.
    But it is urged in defence that the tax was not paid by the manufacturer, but by the first purchaser therefrom — that is, the United States; and being paid by the United States to itself, that it is- a nominal and not an actual payment, and that drawback is only due on an actual payment.
    - i. The case, however, finds that the tax was in fact assessed upon and paid by the manufacturer.
    2. The internal revenue officer refused to accept a release of the manufacturer from tax, on a certificate of indebtedness furnished to bim by tbe United States; and required tbe manufacturer actually to pay tbe tax in money.
    3.Furthermore, no person but tbe manufacturer could, under tbe existing laws, in tbe purview of tbe statute, pay tbe tax imposed and assessed upon bim.
    There was no law imposing any tax upon tbe purchaser of such an article; and tbe United States could not be assessed in any capacity as manufacturer or purchaser. ,
    This defence rests upon an interpretation put upon a clause in tbe contract between tbe manufacturer and purchaser for tbe construction and purchase of this locomotiye, wherein tbe purchaser agreed to pay for tbe locomotive “ $27,000 and government tax on delivery.”
    1. In considering tbe meaning of this clause, it is to be observed that tbe intendment and uniform administration of tbe law allowing drawback recognized tbe purchaser of a taxed article as tbe person actually paying tbe tax thereon, whether it were so expressed in tbe bargain of sale or not. Tax, as a part of tbe cost, became at once an element of price. Only upon this hypothesis could drawback be paid to tbe purchaser, who has never paid the tax save as apart of the price.
    
    Accordingly tbe purchaser, under tbe contract referred to, agreed to do and did no more than every other purchaser of a taxed article does; that is, pay the tax to the seller.
    
    
      2. But tbe obvious and unambiguous meaning of tbe contract itself is, that as all that tbe party of tbe one part agreed to pay be agreed to pay to tbe party of tbe other part, on delivery of tbe article manufactured, tbe whole sum so agreed to be paid was tbe price of tbe article manufactured.
    3. If tbe United States.by this contract agreed to do more than every purchaser of a taxed article does — that is, pay tbe tax once, as an element bf price — then they agreed to do this: to pay tbe tax as a part of tbe so-called price, $27,000, and again to pay it a second time specifically as tax.
    
    4. Such a bargain implies a stupidity upon tbe part of that officer, representing tbe United States in this transaction, not to be presumed.
    5. It also implies that be exceeded his authority, which was to purchase an engine, and not to pay taxes.
    
    But it is not material to tbe validity of this claim by whom tbe internal tax has been paid, the statute only requiring that the tax shall have been paid.
    
    When an internal tax has been paid upon an article subject to tax and entitled to drawback upon exportation, the right to such drawback becomes incident to the article itself, and passes to every purchaser of it, so long as the article remains in a condition entitling it to such drawback.
    The United States having sold this article, with the right to drawback incident to it, and such right defined by public law, virtually warranted the purchaser in the enjoyment of the rights incident to the article sold.
    
      Mr. A. D. Robinson and Mr. Assistant Attorney General Meld for the defendants:
    The Court of Claims has no jurisdiction over this case. In ■ Nieholls v. The United States, (7 Wall., p. 122,) the Supreme Court decided that the Court of Claims had no jurisdiction over a claim to recover back duties paid on imported goods which the importer was not liable to pay, and expressed the opinion that cases arising under the internal revenue laws were not within the jurisdiction of the Court of Claims. The reason is that Congress, having made ample and special provisions in constructing a revenue system, cannot be presumed to have intended to give a further and different remedy, and that such a claim is to be determined by the special provisions of the revenue laws.
    It has been decided that Congress can confer upon an executive officer the final determination of the amount of duties payable upon imported merchandise, and has the constitutional right to take away the judicial remedy by action of assumpsit. (Gary v. Curtis, 3 How., p. 236; Curtís, Administrator, v. Feebler, 2 Black, p. 401.)
    In the opinion in Nieholls v.°The United States, (7 Wall., p. 127,) the court say: “The allowing a suit at all was an act of beneficence on the part of the government. As it had confided to the Secretary of the Treasury the power of deciding in the first instance on the amount of duties demandable on any specific importation, so it could have made him the final arbiter in all disputes concerning the same.” If, therefore, Congress has the right to make the determination of the Secretary of the Treasury on the amount of duties demandable on any specific importation final, a fortiori it has the constitutional right to make the determination of the Secretary of the Treasury, or any other executive officer, final upon the question whether any drawback is payable, and if. so, to what amount, in the case of any specific exportation; because, iu the case of a drawback, the duties were lawfully exacted at the time they were exacted, but under a grant from the United States they become, in certain cases, in whole or in part, by the subsequent fact of exportation, payable back to the exporter; and, in making this grant, Congress has the right to determine upon what conditions the drawback shall be paid, and what officer or persons, judicial or not judicial, shall determine the questions of law and fact involved.
   Peck, J.,

delivered the opinion of the court:

The claimant in this case is a corporation created by the State of Maine, and having its place of business there.

The petitioner claims a drawback amounting to the sum of $6,480, as having been paid as tax on four locomotives and tenders manufactured by the claimants and sold to the defendants, the said locomotives and tenders having been repurchased from the defendants and exported by the claimants to two' of the provinces of Great Britain, where they were sold to parties there residing.

The claim to recover as drawback the amount of tax which the claimants allege they paid to the United States rests upon the 171st section of the act “ to provide internal revenue to support the government, to pay interest on the public debt, and for other purposes,” approved 30th' June, 1864. (13 Stat. L., p. 223.)

That section provides that there shall be an allowance or drawback on all articles on which any internal duty or tax shall have been paid, excepting certain articles named, of which locomotives- and tenders do not make a part, equal in amount to the tax or duty paid thereon, and no more, when exported; the evidence that any such duty or tax has been paid to be furnished to the satisfaction of the Commissioner of Internal Bev-enue by such person or persons as shall claim the allowance or drawback, and the amount to be ascertained under such regulations as shall from time to time be prescribed by'the Commissioner, under the direction of the Secretary of the Treasury, and the same shall be paid by the warrant of the Secretary on the Treasurer of the United States, out of any money arising from internal revenues not otherwise appropriated. The manner of the allowance and the mode of payment, and'all matters in relation to drawbacks, are subjected to the discretion and judgment of the Secretary of the Treasury, with whom the law seems definitively to have left the power in relation to the whole subject.

Several questions were presented for the consideration and decision of the court in this case, which were ably discussed for the claimant and the United States. We, however, feel ourselves precluded from any decision upon those points. The view we take of the main question renders any comment upon the various minor points presented altogether unnecessary.

The Supreme Court, in the case of Nicholls v. The United States, (7 Wallace’s Repts., p. 122,) has decided that cases arising under the administration of the internal revenue laws are not within the jurisdiction of this court. Although in the case referred to the question presented arose out of the laws regulating the payment of duties on merchandise imported into the United States, in which the internal revenue laws were not directly implicated, that court has thought proper to say, after discussing the necessity of observing the line of duty prescribed under the act of 1864, already referred to: u The mischiefs that would result, if the aggrieved party could disregard the pro'visions in the system designed expressly for his security and benefit, and sue at any time in the Court of Claims, forbid the idea that. Congress intended to allow any other modes to redress a supposed wrong in the operation of the revenue laws than such as are particularly given by those laws.” Without pursuing the subject further, we are satisfied that cases arising under the revenue laws are not within the jurisdiction of the Court of Claims.”

These opinions and declarations close the doors of this court against petitions like that now under consideration, and leave us no alternative but to dismiss them.

This petition is dismissed.

Nott, J.,

concurring:

I am compelled to place this case upon another ground than that assumed by the opinion of the court. It is not the case of a suitor seeking to recover back money illegally collected by the revenue officers, and paid into the Treasury without the authority of law. It is the case of a party seeking affirmative relief, given, not by the general principles of law, but by an express statutory provision, which at the same time prescribes a special mode of obtaining redress, and designates a particular tribunal as having what the courts have again and again held to be exclusive jurisdiction. The cases of Meade, in this court, (2 C. Cls. R., p. 224;) of De Bode, in the House of Lords, (3 Clarke, H. L. Cases, p. 468;) of Barnard’s heirs v. Ashley’s heirs, in the Supreme Court, (18 How. R., p. 43,) sufficiently illustrate the principle on which this opinion rests.