Court Opinion

ID: 9647892
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:54:17.944434+00
Date Added: 2024-06-11T15:23:55.837007
License: Public Domain

GREEN, Judge (concurring).
I concur in the foregoing opinion but think that it might bo well to make some further observations upon matters to which no direct reference has been made therein. Necessarily this will have to be done at the risk of some repetition in order to present continuity of thought.
While the case presents some quite interesting questions of law, its determination must rest largely upon the findings of fact made by the court which, with the exception of finding 23 (not included in the court commissioner’s report), are accepted by both parties to the ease. The plaintiff filed a request for some additional findings, but evidently it was concluded they were not material as no reference was made thereto in argument. The last finding (finding 23) was made by the court aud is one of ultimate fact upon all of the evidence in the case. In my opinion it precludes any recovery on behalf of the plaintiff for reasons hereinafter stated.
In connection with this finding it should be stated that the defendant called as a witness on its behalf the collector of the district in which the plaintiff resided and much argument has been presented on both sides, both written and oral, as to what construction should be placed upon the testimony of the collector. Any questions arising upon the *138argument as to ho-w his testimony should be interpreted are necessarily settled by the findings.- The foregoing findings and opinion show that the taxes for the years 1916, 1917, and 1918 were audited by the commissioner and the plaintiff was advised of the results of this audit and the manner in which they had been calculated; that shortly thereafter the commissioner proceeded to assess additional taxes for these years accordingly and a little later sent plaintiff a notice and demand for the payment thereof; that the plaintiff thereupon filed amended returns for the years 1919, 1920, and 1921 computed on the same .basis and showing overassessments for whieh it made claims for credit, the amount of whieh it requested be applied in part to the satisfaction of the taxes now in controversy. Plaintiff’s computation showed $37,458.81 due the government for whieh a cheek was inclosed. The collector was advised of this proceeding and thereafter, as finding 13 recites, “took no further action toward the collection of the balance of the tax deficiencies outstanding against the plaintiff for the fiscal years ended November 30, 1917 and 1918, respectively, until the claims for credit were acted upon by the Commissioner of Internal Revenue.” The finding further recites that this was in accordance with the general practice of the office of the collector in such cases. To this finding the plaintiff made no exception and it is not now claimed by any one that the additional findings requested by plaintiff with reference to the collect- or’s testimony are in any degree material. Upon this condition of the record the question of what construction should be placed upon the collector’s testimony and what weight should be given it can safely rest. Further than this on the controverted point the court did not go in making its findings and its reasons for so doing appear to me to be quite obvious. In this particular ease, where the determination of the matters in controversy rested wholly with the commissioner’s office, what the collector did is quite important but what he considered was the effect of the regulations and what he, thought was the proper construction to place upon them, are, as it seems to me, of no importance whatever, lie was under the direction and orders of the treasury, which direction and orders were given by the commissioner’s office, and the government is not precluded by any ideas he might have had about the matter. The commissioner could, at any time áfter the taxes had been assessed and proper notice given, have directed the collector to proceed with the collection thereof. What the prior rulings of the office had been may be a factor in determining such ultimate facts as are stated in finding 23, but it is the province of the court to determine the weight thereof under the circumstances. Departmental rulings have often been inconsistent and ambiguous and not always in accordance with law. I do not think it is necessary to review those which have been cited on behalf of the plaintiff any further than to say that I do not entirely agree with the construction placed thereon by counsel for defendant and think that all questions in connection with their application to the case are completely settled by the findings of the court.
In a case like the one now before the court where the motives of the parties thereto are a very material factor in its determination, the court properly takes into consideration in determining the ultimate facts not only the facts concerning which direct testimony is given but all of the circumstances of the case which bear thereon and throw light upon the motives of the parties. When the evidence was so reviewed, the majority of the court has found in effect that the officials of the commissioner’s office were lulled to sleep by the actions of the plaintiff in concurring in the basis of computing the amount of over-assessment, in submitting for defendant’s consideration a computation thereof, in requesting that the amount thereof so far as necessary be applied upon the payment of the settlement of the taxes in controversy, and filing a claim for such a credit. The court has found that the plaintiff understood very well that time would be taken for such computation and this was evidenced by the fact that after the computation had been made the plaintiff promptly settled the balance although the statute of limitations had expired. Where an account is hanging in the balance, and one party says to another with reference to certain items of credit that they should be applied on another item,owing to the first party, and the second party says in effect, “That is right and I ask that you so apply it,” then and in such a ease the minds of the parties have met as completely as if they ha.d signed and sealed a written agreement; and that, as the majority views it, is the situation whieh is presented here. The understanding was complete from the time the plaintiff responded to the notice and demand of payment and told the commissioner’s office in substance that it was in entire aceord with their view of the ease and wanted its taxes to be settled accordingly.
In my opinion it is useless to speculate as to what the defendant through the eommis*139sioner might have done if the actions of the plaintiff and the circumstances of the case had been different. The argument seems to be that the commissioner's office would have taken no different action if the plaintiff had not substantially agreed to pay the taxes when they were computed. Of this we have no testimony, no findings, nor do I know how it would be possible to introduce competent evidence as to what any individual might do under circumstances which never existed. Under the understanding between the parties as found by the court, the defendant could safely pigeonhole the ease until the office had time to properly compute and determine the amount of credit to he given the plaintiff and give no thought to the matter for the time being. The ease was completely settled; there was no occasion for any haste in relation to it, no reason on the part of the commissioner’s office to doubt that the plaintiff would make good the understanding between them, which its subsequent payment of the balance of the taxes (for which no recovery is now sought) clearly showed existed on its part as well as on the part of the commissioner’s office. The commissioner was induced by the acts and conduct of the plaintiff to take the course which he followed and had the right to expect the payment according to the understanding. When the plaintiff, years later, changed attitude, the law, as stated in Dickerson v. Colgrove, 100 U. S. 578, 580, 25 L. Ed. 618, quoted in the majority opinion, is peculiarly applicable. In such cases the plaintiff, having led the defendant to expect payment, could not subject the defendant “to loss or injury by disappointing the expectations” upon which the defendant acted. “There is no rule more necessary to enforce good faith than that which compels a person to abstain from asserting claims which -he has induced others to suppose ho would not rely on.”
It should he carefully kept in mind that in the foregoing opinion of the majority the matter of estoppel is not based merely upon the fact that plaintiff filed a claim for credit. Conceding for the sake of the argument that this alone would not be sufficient, there is still no occasion to discuss that matter. It is the actions of the plaintiff as a whole and all the circumstances of the case as shown by the evidence taken in connection with such actions, which form the basis of the findings in the ease and upon which the decision of the court, is founded.
One other matter ought to he mentioned. It seems to be contended by counsel for plaintiff in argument that it is impossible for a taxpayer whoso taxes were originally properly assessed and computed to make such a payment after the time the statute of limita^lions has run without having the right to sue and recover it back. Reasoning from the statute, it is argued that any such payment is void and in effect that there are absolutely no exceptions to this rule. I cannot believe lhat Congress ever intended by the provisions of the statute which are relied upon to provide that a taxpayer who went to the commissioner’s office and said to the commissioner, “Some taxes have been properly assessed against me. The time of limitation for collection through your office has expired, but I feel that I am ethically bound to pay these taxes,” and thereupon makes payment to the commissioner, could the next day, upon motives not quite so honorable, bring suit to recover the payment. It may be said that such is the lang uage of the act but it is not difficult to find cases in which the literal application of statutes has not been held to apply to eases which obviously were not in contemplation by Congress at the time the statute was enacted.
A conspicuous example is often broughl to the attention of this court. In the most sweeping terms, seetion 3477 of the Revised Statutes (31 USCA § 203) declares all assignments of claims upon the United States to be void unless made after the allowance thereof. Yet the Supreme Court, in Goodman v. Niblack, 102 U. S. 556, 561, 26 L. Ed. 229, held that a voluntary assignment for the benefit of creditors was “such a meritorious act” that it did not come “within the evil which Congress sought to suppress” by the statute referred to and was valid as to a claim against the government. The construction contended for by the plaintiff would lead to such grotesquely absurd results that I hardly think anyone would claim that it was so intended by Congress, notwithstanding it may be within the literal application of the language of the statute.
It is said that at the time when the provision under consideration was placed in the statute, the House bill originally had a provision modifying it somewhat so that it would not apply to cases where claims for credit had been filed but that this was taken out in conference. Whatever this may show with reference to the mere filing of a claim for credit, I think it has no application here because the whole ease of defendant, in my opinion, is founded upon the series of.transactions that included a request for the application of the overassessment upon the taxes in controversy; and which upon the *140whole of the evidence as shown by the findings, constitute an understanding and agreed ment between the parties.
It is, however, not necessary to pass on the question just considered in order to make a decision in the instant case. ” If the plaintiff is estopped at all, it is estopped from claiming any benefit under the sections upon whieh it relies. It is one' of the features of quasi or equitable estoppel that it prevents the operation of some provision of law whieh might otherwise be invoked in favor of the party estopped. I am dearly of the opinion in concurrence with the majority of the court that this estoppel exists and that the plaintiff therefore cannot recover.