Source: https://caselaw.findlaw.com/us-supreme-court/219/250.html
Timestamp: 2019-04-21 15:19:12+00:00

Document:
The plaintiff alleged that in May, 1899, Stratton had conveyed to a corporation known as Stratton's Independence, Limited, certain lands in the state of Colorado by deed reciting a consideration of $4,850,000; that internal revenue stamps of the value of $4,850 were affixed to the deed, whereas the actual consideration of the conveyance and the value of the lands was $9,733,000, and by reason thereof there became due and payable to the United States from Stratton a revenue tax amounting to $9,733, of which the sum of $4,833 remained unpaid, internal revenue stamps therefor not having been attached to the deed or canceled; that the Collector of Internal Revenue of the United States for the district of Colorado had reported the facts to the Commissioner of Internal Revenue, who had determined that the sum of $9,733 should have been paid, and demand for payment having been made and refused, the said Commissioner had directed suit be instituted.
The applicable provisions of the war revenue act of June 13, 1898, chapter 448 (30 Stat. at L. pp. 448-470; 2 U. S. Rev. Stat. Supp. pp. 779- 804, U. S. Comp. Stat. 1901, pp. 2286-2311), are set forth in the margin, together with the amendment to 13, made by the act of March 2, 1901, chapter 806 (31 Stat. at L. 941, U. S. Comp. Stat. 1901, p. 2296).
"Sec. 6. That on and after the first day of July, eighteen hundred and ninety-eight, there shall be levied, collected, and paid, for and in respect of the several bonds, debentures, or certificates of stock and of indebtedness, and other documents, instruments, mat- [219 U.S. 250, 252] Assistant Attorney General Denison and Mr. Barton Corneau for plaintiff in error.
___ ters, and things mentioned and described in schedule A of this act, or for or in respect of the vellum, parchment, or paper upon which such instruments, matters, or things, or any of them, shall be written or printed by any person or persons or party who shall make, sign, or issue the same, or for whose use or benefit the same shall be made, signed, or issued, the several taxes or sums of money set down in figures against the same, respectively, or otherwise specified or set forth in the said schedule. . . .
'Sec. 7. That if any person or persons shall make, sign, or issue, or cause to be made, signed, or issued, any instrument, document, or paper of any kind or description whatsoever, without the same being duly stamped for denoting the tax hereby imposed thereon, or without having thereupon an adhesive stamp to denote said tax, such person or persons shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than one hundred dollars, at the discretion of the court, and such instrument, document, or paper, as aforesaid, shall not be competent evidence in any court.
'Sec. 14. That hereafter no instrument, paper, or document required by law to be stamped, which has been signed or issued without being duly stamped, or with a deficient stamp, nor any copy thereof, shall be recorded or admitted, or used as evidence in any court until a legal stamp or stamps, denoting the amount of tax, shall have been affixed thereto, or prescribed by law. . . .
'Sec. 15. That it shall not be lawful to record or register any instrument, paper, or document required by law to be stamped unless a stamp or stamps of the proper amount shall have been affixed and canceled in the manner prescribed by law; and the record, registry, or transfer of any such instruments upon which the proper stamp or stamps aforesaid shall not have been affixed and canceled as aforesaid shall not be used in evidence.
* 'Sec. 25. That the Commissioner of Internal Revenue shall cause to be prepared for the payment of the taxes prescribed in this act suitable stamps denoting the tax on the document, article, or thing to which the same may be affixed, and he is authorized to prescribe such method for the cancelation of said stamps, as substitute for or in addition to the method provided in this act, as he may deem expedient. The Commissioner of Internal Revenue, with the approval [219 U.S. 250, 255] of the Secretary of the Treasury, is authorized to procure any of the stamps provided for in this act by contract whenever such stamps cannot be speedily prepared by the Bureau of Engraving and Printing; but this authority shall expire on the first day of July, eighteen hundred and ninety-nine. That the adhesive stamps used in the payment of the tax levied in schedules A and B of this act shall be furnished for sale by the several collectors of internal revenue, who shall sell and deliver them at their face value to all persons applying for the same, except officers or employees of the internal-revenue service: Provided, That such collectors may sell and deliver such stamps in quantities of not less than one hundred dollars of face value, with a discount of one per centum, except as otherwise provided in this act. And he may, with the approval of the Secretary of the Treasury, make all needful rules and regulations for the proper enforcement of this act.
'Conveyance: Deed, instrument, or writing, whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, her, or their direction, when the consideration or value exceeds one hundred dollars and does not exceed five hundred dollars, fifty cents; and for each additional five hundred dollars or fractional part thereof in excess of five hundred dollars, fifty cents.
[219 U.S. 250, 257] Messrs. D. P. Strickler and P. H. Holme for defendants in error.
At comon law, customs duties were recoverable by the Crown by an information in debt or an exchequer information in the nature of a bill in equity for discovery and account. These informations rested upon the general principle 'that in the given case the common law or the statute creates a debt, charge, or duty in the party personally to pay the duties immediately upon the importation; and that therefore the ordinary remedies lie for this, as for any other acknowledged debt due to the Crown.' United States v. Lyman, 1 Mason, p. 499, Fed. Cas. No. 15,647. See also Comyn's Dig. (title 'Debt' A, 9); Atty. Gen. v. Stranyforth, Bunbury, 97; Atty. Gen. v. Weeks, Bunbury, 223; Atty. Gen. v. Jewers, Bunbury, 225; Atty. Gen. v. Hatton, Bunbury, 262.
A similar rule has been applied in the case of internal revenue taxes. United States v. Washington Mills, by Clifford, J., 2 Cliff. 601, 607, Fed. Cas. No. 16,647; Dollar Sav. Bank v. United States, 19 Wall. 227, 22 L. ed. 80; United States v. Pacific R. Co. by Miller and Dillon, JJ., 4 Dill. 66, Fed. Cas. No. 15,983; United States v. Tilden, by Blatchford, J., 9 Ben. 368, Fed. Cas. No. 16,519.
'It must also be conceded to be a rule of the common law in England, as it is in Pennsylvania and many of the other states, that where a statute creates a right and provides a particular remedy for its enforcement, the remedy is generally exclusive of all common-law remedies.
'But it is important to notice upon what the rule is founded. The reason of the rule is that the statute, by providing a particular remedy, manifests an intention to prohibit other remedies, and the rule, therefore, rests upon a presumed statutory prohibition. It applies and it is enforced whan anyone to whom the statute is a rule of conduct seeks redress for a civil wrong. He is confined to the remedy pointed out in the statute, for he is forbidden to make use of any other. But by the internal revenue law, the United States are not prohibited from adopting any remedies for the recovery of a debt due [219 U.S. 250, 261] to them which are known to the laws of Pennsylvania. The prohibitions, if any, either express or implied, contained in the enactment of 1866, are for others, not for the government. They may be obligatory upon tax collectors. They may prevent any suit at law by such officers or agents. But they are not rules for the conduct of the state. It is a familiar principle that the King is not bound by any act of parliament unless he be named therein by special and particular words. The most general words that can be devised (for example, any person or persons, bodies politic or corporate) affect not him in the least, if they may tend to restrain or diminish any of his rights and interests. He may even take the benefit of any particular act, though not named. The rule thus settled respecting the British Crown is equally applicable to this government, and it has been applied frequently in the different states, and practically in the Federal courts. It may be considered as settled that so much of the royal prerogatives as belonged to the King in his capacity of parens patrioe, or universal trustee, enters as much into our political state as it does into the principles of the British Constitution.
'It must, then, be concluded that the government is not prohibited by anything contained in the act of 1866 from employing any common-law remedy for the collection of its dues. The reason of the rule which denies to others the use of any other than the statutory remedy is wanting, therefore, in applicability to the government, and the rule itself must not be extended beyond its reason.' See also United States v. Stevenson, 215 U. S. p. 197, 54 L. ed. 156, 30 Sup. Ct. Rep. 35.
The statute in the Savings Bank Case contained a provision (now in 3213, Rev. Stat., U. S. Comp. Stat. 1901, p. 2083) which expressly authorized the bringing of an action. But the court also found a sufficient basis for its judgment in the general power of the government to collect by suit taxes that are due, where the statute imposing the tax does not deny that remedy. [219 U.S. 250, 262] This point was presented, considered, and decided in the determination of the cause, and the decision is none the less authoritative because there was another ground for the ultimate conclusion. Florida C. R. Co. v. Schutte, 103 U. S. p. 143, 26 L. ed. 336; Union P. R. Co. v. Mason City & Ft. D. R. Co. 199 U. S. p. 166, 50 L. ed. 137, 26 Sup. Ct. Rep. 19.
Neither Lane County v. Oregon, 7 Wall. 71, 19 L. ed. 101, nor Meriwether v. Garrett, 102 U.S. 472 , 26 L. ed. 197, relied upon by the defendants, involved the question. In the former case it was held that the acts of Congress of 1862 and 1863 [12 Stat. at L. 345, 532, 709, chaps. 33, 142, 73], making United States notes a legal tender for debts, had no reference to taxes imposed by state authority. The legal tender acts expressly provided that the notes should be receivable for national taxes, and the context forbade the conclusion that Congress intended to include state taxes under the term 'debts,' and there was hence no conflict with the statute of Oregon which required the taxes due the state to be collected in coin.
In Meriwether v. Garrett, supra, it was held that taxes levied before the repeal of the charter of a municipality, other than such as were levied in obedience to the special requiremant of contracts entered into under the authority of law, and such as were levied under judicial direction for the payments of juegments recovered against the city, could not be collected through the instrumentality of a court of chancery at the instance of the city's creditors. Such taxes could be collected only under authority from the legislature.
A tax may or may not be a 'debt' under a particular statute, according to the sense in which the word is found to be used. But whether the government may recover a personal judgment for a tax depends upon the existence of the duty to pay, for the enforcement of which another remedy has not been made exclusive. Whether an action of debt is maintainable depends not upon the question who is the plaintiff or in what manner the obligation was [219 U.S. 250, 263] incurred, but it lies whenever there is due a sum either certain or readily reduced to certainty. Stockwell v. United States, 13 Wall. p. 542, 20 L. ed. 493.
Here the tax was a stamp tax, but the language as clearly imports the obligation to pay as did that of the statute before the court in the Meredith Case, supra. Section 6 of the war revenue act of 1898 provided that there should be 'levied, collected, and paid' in respect of the instruments mentioned, 'by any person or persons or party who shall make, sign, or issue the same, or for whose use or benefit the same shall be made, signed, or issued, the several taxes or sums of money' set forth in the schedule which followed. There is nothing in the nature of a stamp tax which per se negatives either the personal obligation, otherwise to be derived from the words imposing the tax, or its collection by action. The stamp is to be affixed to the instrument 'to denote said tax.' Secs. 7, 13, 14. Section 25 provided that the Commissioner of Internal Revenue should cause to be prepared 'for the payment of the taxes prescribed in this act suitable stamps denoting the tax on the document, article, or thing to which the same may be affixed.' The stamp is the evidence, and its purchase the convenient means, of payment. When a statute says that a person shall pay a given tax, it obviously imposes upon that person the duty to pay, and this may be enforced through the ordinary means adapted to the recovery of a definite sum due, unless that course is clearly prohibited.
The objection was made in the Savings Bank Case, supra, that the tax ahd not been assessed. The court held, however, that no other assessment than that made by the statute was necessary in order to determine the extent of the bank's liability. Following this rule, Judge Blatchford said in United States v. Tilden, 9 Ben. p. 386, Fed. Cas. No. 16,519, where the action was brought to recover unpaid taxes on income: 'The extent of the liability of the individual for [219 U.S. 250, 264] income tax is defined by the statute, equally with the extent of the liability of the bank for the tax on undistributed earnings. In each case it is necessary, in an action of debt for the tax, to resort to sources of information outside of the statute, to ascertain the amount on which the per centum of tax fixed by the statute is to be calculated. . . . The difference between the two cases, in that respect, if there be any, will be, in every case, one of degree merely, not of principle. The statute, in imposing the per centum of tax on the income of the individual, makes a charge on him of a sum which is certain for the purposes of an action of debt, because it can be made certain through the action of a judicial tribunal, by following the rules laid down in the statute. That is the principle of the decision in the case of the bank, and it controls the present case.' See also King v. United States, 99 U. S. p. 233, 25 L. ed. 374; United States v. Erie R. Co. 107 U. S. p. 2, 27 L. ed. 385, 2 Sup. Ct. Rep. 83; United States v. Philadelphia & R. R. Co. 123 U. S. p. 114, 31 L. ed. 139, 8 Sup. Ct. Rep. 77; and United States v. Snyder, 149 U. S. p. 215, 37 L. ed. 707, 13 Sup. Ct. Rep. 846. The statute now before us fixes a tax of a specified amount, according to the consideration or value of the lands conveyed.
It is insisted, however, that the provision for penalties excludes the idea of a personal liability. Thus it is made a misdemeanor to sign or issue one of the described instruments to which a stamp has not been affixed, punishable under 7 by a fine of not more than $100, and not exceeding $200 under 10, in the case of a bill or note. And under 13, where there is intent to evade the law, the offense is punished 'by a fine not exceeding $50, or by imprisonment not exceeding six months, or both, in the discretion of the court.' The unstamped instrument is made inadmissible in evidence ( 7, 14), is not allowed to be recorded ( 15,) and by the provision of 13 is to 'be deemed invalid and of no effect.' [219 U.S. 250, 265] But these penalties were provided in order to induce the payment of the tax, and not as a substitute for payment. It cannot be supposed that Congress intended, by penalizing delinquency, to deprive the government of any suitable means of enforcing the collection of revenue. In large transactions, as in the case at bar, the fine which could be imposed would be much less than the tax, and no reason is suggested why the government should forego the collection of that which, under the statute, is its due. Punishment by imprisonment, under 13, is imposed only where it can be shown that there was an 'intent to evade the provisions' of the act; and while this remedy is appropriate in such a case, and is for the obvious purpose of discouraging evasion, it is without application where, for any other reason, the tax has not been paid, and thereby the government has lost its revenue. The provision invalidating the instrument is likewise punitive. The object was not primarily to deprive instruments of effect, but to insure the discharge of the obligation to pay; and that obligation would still be undischarged, even though, by reason of the nonpayment, the instrument was deemed invalid.
It is insisted, however, that there is no provision for the removal of the ban from the instrument in case the tax were collected by suit, and that this shows the intention to bar the latter remedy; for it is said that the purpose could not be to destroy the effect of the instrument and at the same time to compel the payment of the tax.
Neither the punitive provision, nor the means thus afforded to escape it through a voluntary payment, indicate an intention to deprive the government of the right to compel payment by action. The party may pay the tax in the first instance, or he may subsequently make payment as the statute provides, and thus render the instrument effective. If he is unwilling or fails to avail himself of this opportunity, why should he be heard to insist that because the instrument is made invalid he should escape payment of what is due the government? In the face of the express requirement of the statute that he shall pay the tax, there is no basis for the contention that from the provisions affecting the validity of the instrument should be implied an intent to prohibit the enforcement or the tax by suit.
Further, as the obvious purpose is to vali date the instrument in case the prescribed payment is made, the satisfaction of a judgment for the recovery of the tax must be deemed the equivalent of the payment of the price of the stamps under the provisos above quoted. Section 3216 of the Revised Statutes (U. S. Comp. Stat. 1901, p. 2084) provides: 'All judgments and moneys recovered or received for taxes, costs, forfeitures, and penalties shall be paid to collectors as internal taxes are required to be paid.' If the case is not one within the second proviso permitting the remission [219 U.S. 250, 269] of the penalty, the additional payment of $10 will be required to meet the conditions of the first proviso. But so far as the tax is concerned, the person liable therefor, on satisfying the judgment, will have the same right to have the instrument stamped by the collector as though he had paid the taxes to the officer without suit. Such a case would present no administrative difficulty in accomplishing the intent of the statute.
Upon these grounds we conclude that the United States was entitled to maintain this action, and that the demurrer should have been orerruled. The judgment is therefore reversed.

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