Source: http://www.law.cornell.edu/supremecourt/text/289/373
Timestamp: 2014-03-15 16:47:55
Document Index: 565847233

Matched Legal Cases: ['§ 1014', '§ 3226', '§ 156', '§ 2', '§ 3210', '§ 140', '§ 12', '§ 8', '§ 12', '§ 12', '§ 989', '§ 842', '§ 3182', '§ 102', '§ 1', '§ 145', '§ 250', '§ 24', '§ 41']

GEORGE MOORE ICE CREAM CO., Inc., v. ROSE, Collector of Internal Revenue. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews GEORGE MOORE ICE CREAM CO., Inc., v. ROSE, Collector of Internal Revenue.
289 U.S. 373 (53 S.Ct. 620, 77 L.Ed. 1265)
Argued: April 19, 20, 1933.
[HTML] Mr. J. C. Murphy, of Atlanta, Ga., for petitioner.
Argument of Counsel from page 374 intentionally omitted
1. At common law, and for many years under the federal statutes, protest at the time of payment was a condition precedent to the recovery of a tax. Elliott v. Swartwout, 10 Pet. 137, 153, 9 L.Ed. 373; Curtis's Adm'x v. Fiedler, 2 Black, 461, 17 L.Ed. 273; Chesebrough v. United States, 192 U.S. 253, 24 S.Ct. 262, 48 L.Ed. 432; United States v. N.Y. & Cuba Mail S.S. Co., 200 U.S. 488, 26 S.Ct. 327, 50 L.Ed. 569. 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;
26 U.S.C. 156 (26 USCA § 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.
We think the intention of the Congress was to remove the requirement of protest in any suit thereafter brought, irrespective of the date of the underlying payment.
If we turn to extrinsic tokens of intention, and view the statute in the light of its history and aims, the signposts are the same. The requirement of protest as it stood before the statute was not limited to suits against a collector of internal revenue or other public officer. It extended and was often applied to suits against the government itself. Even in suits against the collector, the United States almost always the genuine defendant; the liability of the nominal defendant being formal rather than substantial. In this situation the government was unjustly enriched at the expense of the taxpayer when it held on to moneys that had been illegally collected, whether with protest or without. So at least the lawmakers believed, and gave expression to that belief, not only in the statute, but in Congressional reports. Senate Report, No. 398, 68th Congress, First Session, pp. 44, 45;
House Report, No. 179, 68th Congress, 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, 32, 35 S.Ct. 499, 59 L.Ed. 825.
As applied to this respondent in the circumstances of his official action stated in the record, the statute is constitutional, though its effect is to broaden liability both for the past and for the future. As the law stood before later statutes, the taxpayer's protest was notice to a collector that suit was about to follow, and was warning not to pay into the Treasury the moneys collected. Elliott v. Swartwout, supra; Smietanka v. Indiana Steel Co., 257 U.S. 1, 4, 42 S.Ct. 1, 66 L.Ed. 99. Statutes first enacted in 1839 (Act of March 3, 1839, c. 82, § 2, 5 Stat. 348) and progressively broadened (R.S. § 3210, 26 U.S.C. 140 (26 USCA § 140)), made it the duty of collectors to pay the money over to the government, whether there had been protest or no protest. At first this was thought to have relieved them of personal liability (Cary v. Curtis, 3 How. 236, 11 L.Ed. 576; Smietanka v. Indiana Steel Co., supra), but later acts of Congress established a different rule, though maintaining the duty to make remittance to the Treasury. (Philadelphia v. The Collector, 5 Wall. 720, 731, 18 L.Ed. 614; Curtis's Adm'x v. Fiedler, 2 Black, 461, 479, 17 L.Ed. 273; The Collector v. Hubbard, supra; Arnson v. Murphy, 109 U.S. 238, 241, 3 S.Ct. 184, 27 L.Ed. 920; 5 Stat. 727; 12 Stat. 434, 725, 729; 12 Stat. 741, § 12; 13 Stat. 239; 14 Stat. 329, § 8). Along with the duty there went a pledge of indemnity by the government itself, a pledge not absolute, it is true, but subject to a condition. 12 Stat. 741, § 12; United States v. Sherman, 98 U.S. 565, 25 L.Ed. 235; Philadelphia v. The Collector, supra, page 733 of 5 Wall., 18 L.Ed. 614; Smietanka v. Indiana Steel Co., supra. The condition was that a certificate be granted by the court either (a) that there was probable cause for the act done by the collector or other officer, or (b) that he acted under the directions of the Secretary of the Treasury or other proper officer of the government. 12 Stat. 741, § 12, Act of March 3, 1863. In that event no execution was to issue upon the judgment, but the amount of the recovery was to be paid out of the Treasury. The pledge of indemnity was carried forward into the Revised Statutes with only verbal changes (R.S. § 989), and stands upon the books to-day. 28 U.S.C. 842 (28 USCA § 842).
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.
This collector did act under the directions of the Secretary of the Treasury, or other proper officer of the government, in the collection of the tax. The complaint shows upon its face that the tax had been duly assessed by the Commissioner of Internal Revenue. In that situation the collector was under a ministerial duty to proceed to collect it. R.S. § 3182, 26 U.S.C. 102 (26 USCA § 102); Erskine v. Hohnbach, 14 Wall. 613, 20 L.Ed. 745. There was nothing left to his discretion. Other duties less definitely prescribed may leave a margin for judgment and for individual initiative. Cf. Agnew v. Haymes (C.C.A.) 141 F. 631. There was no such margin here. His duty being imperative, he is protected by the command of his superior from liability for trespass (Erskine v. Hohnbach, supra; Haffin v. Mason, 15 Wall. 671, 675, 21 L.Ed. 196; Harding v. Woodcock, 137 U.S. 43, 46, 11 S.Ct. 6, 34 L.Ed. 580), and is entitled as of right to a certificate converting the suit against him into one against the government (United States v. Sherman, supra). His position could be no better if there had been protest at the time of payment. He would still have been under a duty to obey the command of his superior and collect the tax assessed. Also he would 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, 3 L.Ed. 364; Agnew v. Haymes, supra; Carroll v. United States, 267 U.S. 132, 149, 45 S.Ct. 280, 69 L.Ed. 543, 39 A.L.R. 790; Dumbra v. United States, 268 U.S. 435, 441, 45 S.Ct. 546, 69 L.Ed. 1032. 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, 16 S.Ct. 43, 40 L.Ed. 188; Crozier v. Krupp, 224 U.S. 290, 32 S.Ct. 488, 56 L.Ed. 771; Joslin Co. v. Providence, 262 U.S. 668, 677, 43 S.Ct. 684, 67 L.Ed. 1167; Dohany v. Rogers, 281 U.S. 362, 366, 50 S.Ct. 299, 74 L.Ed. 904, 68 A.L.R. 434; Hurley v. Kincaid, 285 U.S. 95, 104, 105, 52 S.Ct. 267, 76 L.Ed. 637. 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 to-day 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, page 731 of 5 Wall., 18 L.Ed. 614. 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, 452, 49 S.Ct. 411, 73 L.Ed. 789; Act of February 24, 1855, c. 122, 10 Stat. 612, §§ 1 and 9; Judicial Code, § 145, 28 U.S.C. 250 (28 USCA § 250); Judicial Code, § 24(20), 28 U.S.C. 41(20), 28 USCA § 41(20). They have little utility to-day, 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.