Source: https://supreme.justia.com/cases/federal/us/124/315/
Timestamp: 2019-04-23 04:03:55+00:00

Document:
Under § 3220 of the Revised Statutes, the Commissioner of Internal Revenue is authorized to pay to the plaintiff in a judgment recovered against a collector of internal revenue, for damages for a seizure of property for an alleged violation of the internal revenue laws, made by the collector under the direction of a revenue agent connected with the office of the supervisor of internal revenue, the amount of such judgment, and is not restricted to the payment of such amount to the collector.
This was an appeal from the Court of Claims from a judgment against the United States for the sum of $10,130.31. The case is stated in the opinion of the Court.
This is an appeal by the United States from a judgment of the Court of Claims awarding to Frederick Frerichs a recovery of the sum of $10,130.31. The case was decided by that court on a demurrer to the petition alleging that sufficient facts were not set forth to constitute a cause of action. The demurrer was overruled, and the defendants declined to plead further.
"SEC. 3220. The Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized, on appeal to him made, to remit, refund, and pay back all taxes erroneously or illegally assessed or collected, all penalties collected without authority, and all taxes that appear to be unjustly assessed, or excessive in amount or in any manner wrongfully collected; also to repay to any collector or deputy collector the full amount of such sums of money as may be recovered against him in any court, for any internal taxes collected by him, with the cost and expenses of suit; also all damages and costs recovered against any assessor, assistant assessor, collector, deputy collector, or inspector in any suit brought against him by reason of anything done in the due performance of his official duty."
letter to the Commissioner of Internal Revenue stating that he approved of the proposal of the Commissioner "to allow the claim for $10,130.31, to be paid to Frederick Frerichs upon the due entry of satisfaction of the said judgment." On the same day, the Commissioner certified that the claim for that amount had been examined and allowed. On the 2d of February, 1885, the Fifth Auditor of the Treasury Department certified to the First Comptroller of the Treasury that he had examined and adjusted an account between the United States and the Commissioner of Internal Revenue, and found that the sum of $10,130.31 was due from the United States for the payment of the judgment against Coster, payable to Frerichs. On the 10th of February, 1885, the First Comptroller of the Treasury disallowed the claim, and no part of it has ever been paid.
The petition to the Court of Claims states that the claim is founded upon § 3220, and upon the fact that it has been allowed and certified to be paid by the Commissioner of Internal Revenue, with the approval aforesaid of the Secretary of the Treasury.
In the opinion of the Court of Claims delivered in the present case, 21 Ct.Cl. 16, it is stated that the First Comptroller disallowed the claim "for the reason that there was no certificate of probable cause issued, and not sufficient evidence that the seizure was justified." The Court of Claims held that the proper party was entitled to recover the amount of the claim, and that, as between Frerichs and Coster, Frerichs was the proper party.
It is contended for the United States that Coster, and not Frerichs, was the proper party to recover the amount of this claim, and that Frerichs has not alleged that he has satisfied the judgment, nor his readiness to satisfy it on payment of the amount, and it is urged that the award of the Commissioner of Internal Revenue was made in favor of Coster, under the provisions of § 3220, upon the application of Coster.
the petition alleges that the judgment is wholly unpaid. Section 3220 provides that the Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized, on appeal to him made, to repay all damages and costs recovered against any collector in any suit brought against him by reason of anything done in the due performance of his official duty. When, after the recovery against the collector for such damages and costs, he appeals to the Commissioner of Internal Revenue under § 3220 for the payment of the judgment, it is not improper to consider the application as one for the payment to the plaintiff in the judgment. Such payment is plainly authorized by § 3220, and it is apparent upon the papers above recited that both the Commissioner and the Secretary of the Treasury allowed the claim, to be paid to Frerichs, as did also the Fifth Auditor. The claim was thus created as a claim in favor of Frerichs against the United States, and it would be a mere circuity to pay the amount to Coster when Frerichs is the real creditor of the United States, and when the payment directly to Frerichs by the United States would render it certain that Frerichs would receive the money, and could thereupon enter a satisfaction of the judgment. It may be added that as § 3220, in its first clause, provides for the refunding of taxes and penalties to the person from whom they are collected -- that is, to the person to whom the moneys so to be refunded are due -- it is in harmony with such provision that the moneys and damages to be repaid under the second and third clauses should be paid to the person who recovers the judgment for them if the judgment is not paid by the defendant.
It is stated in the opinion of the Court of Claims in this case that it has been the uniform practice of the Commissioner of Internal Revenue and the Secretary of the Treasury, from the first enactment of the refunding statute, to make allowance, in cases of this character, to the judgment creditor, "and not to require the collector first to pay the same out of his own money, and then himself to apply for repayment from the public treasury."
amount in satisfaction of his judgment against Coster. But the averment in the petition that the proposal of the Commissioner, which was approved by the Secretary of the Treasury, was a proposal to allow the claim to be paid to Frerichs upon due entry of satisfaction of the judgment is an adoption by Frerichs of the terms upon which the allowance was made, and is in substance an agreement by Frerichs to receive the amount in satisfaction of the judgment. Nothing more could be required of Frerichs under the award than to enter satisfaction of the judgment simultaneously with the receipt of the money.
"the payment of the amount due by any judgment of the Court of Claims, and of any interest thereon allowed by law, shall be a full discharge to the United States of all claim and demand touching any of the matters involved in the controversy."

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