Source: https://supreme.justia.com/cases/federal/us/289/373/
Timestamp: 2019-04-23 03:56:16+00:00

Document:
(1) That the former rule requiring a protest at the time of payment as a condition precedent to recovery is abolished as to any suit brought after the date of the Act, irrespective of the date of the underlying payment. P. 289 U. S. 375.
(2) This view results from the phraseology and implications of the statute, and is confirmed by its history and congressional reports. P. 289 U. S. 377.
2. The rule that statutes should be so construed as to avoid grave doubts of their validity is inapplicable where the statutory intent is clear. P. 289 U. S. 379.
3. Where an internal revenue Collector, acting by direction of the Commissioner, collects and turns in an income tax assessed by the latter and is sued by the taxpayer for recovery, he is entitled by R.S., § 989 (28 U.S.C. 842), if judgment go against him, to a certificate of the court showing that he so acted, and is relieved of liability to execution; the judgment is payable from the Treasury, and the suit is in effect a suit against the United States. P. 289 U. S. 380.
4. As to such cases, therefore, it cannot be said that § 1014 of the Act of 1924, supra, by abolishing retroactively the requirement of protest by the taxpayer as a condition to his right of action, infringes any right of the Collector under the due process clause of the Fifth Amendment. P. 289 U. S. 383.
5. A general claim of error in assessing net income held amendable after the statutory period. United States v. Memphis Cotton Oil Co., 288 U. S. 62; United States v. Factors & Finance Co., 288 U. S. 89. P. 289 U. S. 384.
Swartwout, 10 Pet. 137, 35 U. S. 153; Curtis' Adm'x v. Fiedler, 2 Black 461; Chesebrough v. United States, 192 U. S. 253; United States v. N.Y. & Cuba Mail S.S. Co., 200 U. S. 488. The rule persisted till 1924, when it was abolished by the Revenue Act of that year with a proviso that pending suits should be unaffected by the change. Revenue Act of 1924, c. 234, 43 Stat. 253, 343, § 1014, amending R.S. § 3226; [Footnote 1] 26 U.S.C. § 156. This suit was not begun till March, 1931, and is thus outside of the proviso . Even so, the payment to be recovered was made in 1923, when protest was still necessary. The petitioner contends that the new rule applies to all suits begun after the adoption of the amendment. The government contends that the old rule survives if the payment was before the amendment, though the suit was begun afterwards.
First Session, pp. 33, 34. The amendment was designed to right an ancient wrong. It did not draw a distinction between suits against the body politic and suits against a public officer who was to be paid out of the public purse. It put them in a single class, and made them subject to a common rule. A high-minded government renounced an advantage that was felt to be ignoble, and set up a new standard of equity and conscience. There was no thought to discriminate between payments made and those to come. A fine sense of honor had brought the statute into being. We are to read it in a kindred spirit. United States v. Emery, 237 U. S. 28, 237 U. S. 32.
The argument is made that power was lacking, though intention be assumed. Defect of power is not suggested where the claim for restitution is against the government itself. The case assumes another aspect, we are told, when the suit is against an officer who is to be personally charged. Until 1924, a Collector was not liable to a taxpayer for a tax illegally collected unless protest gave him notice that he was a party to a wrong. The government suggests that there is an infraction of the Fifth Amendment, a denial of due process, if liability is cast upon him after the event. There is a subsidiary point that at least the doubt is so great as to canalize construction along the course of safety. United States v. La Franca, 282 U. S. 568, 282 U. S. 574; United States v. Jin Fuey Moy, 241 U. S. 394, 241 U. S. 401. "A statute must be construed, if fairly possible, so as to avoid not only the conclusion that it is unconstitutional, but also grave doubts upon that score." United States v. Jin Fuey Moy, supra. But avoidance of a difficulty will not be pressed to the point of disingenuous evasion. Here, the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power. The problem must be faced and answered.
the Revised Statutes with only verbal changes (R.S. § 989), and stands upon the books today. 28 U.S.C. § 842. [Footnote 4] The effect of the certificate, when given, is to convert the suit against the Collector into a suit against the government. United States v. Sherman, supra.
still have been under a duty to make prompt remittance to the Treasury. There had been confided to him no power to review or to revise. Erskine v. Hohnbach, supra; Harding v. Woodcock, supra. The case is not one for a certificate of probable cause, as it might be if the officer had trespassed under a mistaken sense of duty. In such circumstances, a certain latitude of judgment may be accorded to the certifying judge, though even then it is enough that a seizure has been made upon grounds of reasonable suspicion. Locke v. United States, 7 Cranch 339; Agnew v. Haymes, supra; Carroll v. United States, 267 U. S. 132, 267 U. S. 149; Dumbra v. United States, 268 U. S. 435, 268 U. S. 441. One does not speak of probable cause when justification is complete. Here, the certifying judge will be subject to a specific duty upon the facts admitted by the demurrer to relieve the Collector of personal liability and to shift the burden to the Treasury. This Court has often held that a pledge of the public faith and credit will permit the seizure of property by right of eminent domain, though what is due for compensation must be ascertained thereafter. Sweet v. Rechel, 159 U. S. 380; Crozier v. Krupp, 224 U. S. 290; Joslin Co. v. Providence, 262 U. S. 668, 262 U. S. 677; Dohany v. Rogers, 281 U. S. 362, 281 U. S. 366; Hurley v. Kincaid, 285 U. S. 95, 285 U. S. 104-105. The assurance of indemnity is as ample, the reparation prompter and more summary, upon the facts before us here.
A suit against a Collector who has collected a tax in the fulfillment of a ministerial duty is today an anomalous relic of bygone modes of thought. He is not suable as a trespasser, nor is he to pay out of his own purse. He is made a defendant because the statute has said for many years that such a remedy shall exist though he has been guilty of no wrong, and though another is to pay. Philadelphia v. The Collector, supra, p. 72 U. S. 731. There may have been utility in such procedural devices in days when the government was not suable as freely as now.
United States v. Emery, supra; Ex parte Bakelite Corp., 279 U. S. 438, 279 U. S. 452; Act of February 24, 1855, c. 122, 10 Stat. 612, §§ 1 and 9; Judicial Code, § 145, 28 U.S.C. § 250; Judicial Code, § 24(20), 28 U.S.C. § 41(20). They have little utility today, at all events where the complaint against the officer shows upon its face that, in the process of collecting, he was acting in the line of duty and that, in the line of duty, he has turned the money over. In such circumstances, his presence as a defendant is merely a remedial expedient for bringing the government into court.
No such situation is presented by the record now before us. Indeed, no such situation, it would seem, can ever be presented where a Collector has done no more than accept payment of a tax assessed by a superior who has been invested by the statute with power to command. Our duty does not require us to deal with problems merely hypothetical. If a case should develop where a certificate might issue as a matter of discretion, other questions would be here. There would then be need to consider whether the objection of a denial of due process would be open to a Collector until a request for the certificate had been made and refused. "Due process requires that there be an opportunity to present every available defense, but it need not be before the entry of judgment." American Surety Co. v. Baldwin, 287 U. S. 156, 287 U. S. 168; York v. Texas, 137 U. S. 15, 137 U. S. 20. There would be need also to consider whether, in its application to an officer acting of his own motion and not in the fulfillment of the command of a superior, the requirement of protest is a procedural limitation upon the remedy for a wrong, or one of the substantive elements of the wrong itself. We leave those questions open.
The claim in its original form gave notice of specific errors in the adjustment of invested capital. It gave notice also in general terms that, aside from any errors in the adjustment of the capital, there had been an erroneous assessment of net income at the sum of $16,940.18 when, in fact, there had been a loss. We think the statements as to income were subject to amendment. United States v. Memphis Cotton Oil Co., 288 U. S. 62; United States v. Factors & Finance Co., 288 U. S. 89.

References: § 989
 § 1014
 v. 
 v. 
 v. 
 v. 
 v. 
 § 1014
 § 3226
 § 156
 v. 
 v. 
 v. 
 v. 
 § 989
 § 842
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 145
 § 250
 § 24
 § 41
 v. 
 v. 
 v. 
 v.