Court Opinion

ID: 6863595
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:51:45.029479+00
Date Added: 2024-06-11T16:05:17.074724
License: Public Domain

MORTON, Circuit Judge
(concurring).
I concur in the result but upon grounds so different from those relied on in the majority opinion that I will state them. I do not think that in an action at law a claim barred by the statute of limitations can be availed of as a set-off, either directly or under the guise of an equitable defense. In such matters I understand the rule to be that equity follows the law.
It is well settled that an action to recover taxes alleged to have been illegally collected is, essentially, an action for money had and received and is equitable in character and that it devolves upon the plaintiff in such an action to establish that in justice and equity the money sued for belongs to him. Champ Spring Co. v. U. S., 47 F.(2d) 1 (C. C. A. 8), citing authorities. Here, by a mistake for which its officers were in no way to blame, the government collected the tax from the trustees instead of from the beneficiary. If the tax is repaid to the trustees, it will by them be turned over to the beneficiary. As collection from her is barred by limitation, the result will be that the government will lose a tax to which it was justly entitled, and the beneficiary will escape a tax which she ought to have paid. These facts ought not to be ignored. They show that the government is not withholding from the plaintiffs money which in justice it ought not to retain. See Lewis v. Reynolds, 284 U. S. 281, 52 S. Ct. 145, 76 L. Ed. 293. In the Champ Spring Co. Case, su-pra, the government by mistake refunded a tax; the mistake was noticed, and the government officers then proceeded by wholly illegal methods to compel the repayment of the refund; the time for legal collection of the tax expired; and the taxpayer brought suit to recover the sum illegally taken from it. It was held that the taxpayer was not entitled to recover. The principles underlying that decision are applicable here.