Εικόνες σελίδας
PDF
Ηλεκτρ. έκδοση

tax.

Necessarily the Legislature of the state did | and other contentions are made against the not think, and the courts below did not think, that individuals and municipalities stood in the same relation to the evil aimed at or that a public body charged with the care of the interests and welfare of the people would need the same restraint upon its action as an individual, or be induced to detrimental conduct.

Judgment affirmed.

(249 U. S. 503)

RAND v. UNITED STATES. (Argued March 10 and 11, 1919. Decided April 21, 1919.)

No. 213.

Section 29 of the act of 1898 provided that any person or persons having in charge or trust, as administrators, etc., any legacies or distributive shares arising from personal property, the amount of the property exceed. ing $10,000 in actual value, passing, after the passage of the act, from any person possessed of the property, either by will or by the intestate laws of any state or territory, was made subject to a tax to be paid to the United States; the amount of tax being dependent upon the degree of relationship of the taker to the person who died possessed of the property. And there was an increase of the tax with an increase of the value of the property possessed in excess of $25,000. The facts found we give only in summary:

1. INTERNAL REVENUE 36-REFUND-STAT- June 6, 1900, Edmund Dwight died testate. His will was admitted to probate June 28,

UTES.

Under Act June 27, 1902, § 3, and Act July 1900. Elizabeth Cabot, his sister, was named 27, 1912, § 2, authorizing refund of certain tax-executrix of the will. She accepted and quales on application to the Commissioner of Inter-ified, but died January 30, 1902, and Philip nal Revenue, a refund can be made though no Cabot, her son, was appointed administrator, appeal was taken as required by Rev. St. 88 with the will annexed. He qualified. The 3226, 3228 (Comp. St. §§ 5949, 5951), made ap-will, so far as material, *provided as follows: plicable by War Revenue Act June 13, 1898, § 31, and though the tax was voluntarily paid. 2. INTERNAL REVENUE 38- RECOVERY OF TAXES PAID-NECESSITY OF APPLICATION FOR REFUND.

"I give to the New England Trust Company, a corporation duly chartered by the state of Massachusetts, and located in the city of Boston, the sum of one hundred and twenty-five thousand dollars ($125,000), to be invested in the general trust fund of the company and held upon the following trusts: To pay to Mrs. Jennie Lathrop Rand come thereof in semi-annual payments during her life."

* * *

the annual in

The beneficiary of a testamentary trust fund cannot recover the internal revenue tax erroneously paid thereon, under Act June 27, 1902, § 3, and Act July 27, 1912, § 2, without making the application for refund required by those acts, though an application had been made by the personal representative of the estate and by the trustee, and though an application by the October 1, 1900, the trust fund was depositbeneficiary would have been useless because sim-ed with the New England Trust Company, the ilar applications had been denied.

Appeal from the Court of Claims.

Claim by Jennie Lathrop Rand against the United States. Claim dismissed (52 Ct. Cl. 72, 285), and claimant appeals. Affirmed.

Mr. H. T. Newcomb, of New York City, for appellant.

Mr. Assistant Attorney General Brown, for the United States.

trustee designated in the will, which accepted the trust. The fund was not invested separately but as part of the general trust fund of the company. Semi-annual payments of the accrued net income were made to Mrs. Rand to January 14, 1914. No other payments were made to her or for her benefit, nor did she become entitled to any other or additional payments on account of the trust.

September 27, 1900, Elizabeth Cabot made to the United States Bureau of Internal Revenue a return of the legacies in her charge

*Mr. Justice McKENNA delivered the opin- as executrix and passing from Dwight's esion of the Court.

This case involves a consideration of the inheritance tax law of June 13, 1898, generally called the War Revenue Act (30 Stat. 448, 464, 465, c. 448), and was brought in the Court of Claims to recover the amount of a tax assessed and collected under that law.

tate to the persons named therein, in which was included the legacy to Mrs. Rand, aged 63, stranger to the decedent, of the clear value of $125,000, the taxable amount of which, after a particular exemption, she stated to be $40,355.91, with $7.50 per hundred dollars as the rate of taxation, and the amount of tax The Court of Claims dismissed the case on as $3,026.69, and she reported the legacy as the grounds: (1) That appellant did not file in trust with the New England Trust Comany claim with the Commissioner of Internal pany. It is not shown that the collector of Revenue; (2) that the tax was voluntarily internal revenue or other officer made a depaid. The decision is resisted by appellant mand for the tax, but September 28, 1990,

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

#505

909*

the Court of Claims did. The case presents, therefore, at the outset the question whether the conditions of suit required by that section were satisfied as qualified or relieved by the acts of 1902 and 1912, hereafter referred to.

Elizabeth Cabot paid to the proper collector | upon section 3226, R. S. (Comp. St. § 5949), as the tax out of the funds and it has since been retained by the United States. The sum was advanced by Elizabeth Cabot, at the request of Mrs. Rand and other legatees, pursuant to an agreement made September 28, 1900, by which the taxes paid by Elizabeth Cabot were to be refunded to her and were repaid to her. *The tax paid by her was determined to be the proper tax by regulations of the Commissioner of Internal Revenue on December 16, 1898. The regulations contained rules and tables for the determination of the duty or tax to be paid to the United States upon legacies or distributive shares arising from personal property, imposed by the act of June 13, 1898.

The only assessment ever made under sections 29 and 31 of the act of 1898 and amendments upon the interest of Mrs. Rand in the interest created in the trust fund under Dwight's will was made in pursuance of the rules, tables and instructions of the commissioner and there was no specific investigation by that officer of her expectancy of life or as to the earning capacity of the trust fund otherwise than by application of the tables. The value of her interest was so determined to be $42,320.60, from which was deducted the inheritance tax of Massachusetts, leaving a net balance of $40,355.91, upon which the tax was assessed at the statutory rate of $7.50 per hundred dollars. The computation was from the death of Dwight, the decedent.

Section 3226 provides that no suit shall be maintained for the recovery of a tax illegally or erroneously assessed or collected, "until appeal shall have been duly made to the Commissioner of Internal Revenue, according to provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof, and a decision of the commissioner has been had therein." If, however, it is provided, decision be delayed more than six months from the date of the appeal, suit may be brought within another period prescribed, which it is not necessary to mention.

The section is clear enough and unless modified or changed precludes the present suit as it was applicable to the tax involved (section 31 of the Act of 1898). But section 3 of the Act of 1902 and section 2 of the Act of 1912, supra, are invoked as removing the bar of section 3226. Section 3 of the Act of 1902 directs the Secretary of the Treasury to refund upon proper application being made to the Commissioner of Internal Revenue any tax that may have been collected on contingent beneficial interests which shall not have become vested prior to July 1, 1902. Section 2 of the Act of July 27, 1912, has a like diUnder authority of the act of Congress of rection to the Secretary of the Treasury to July 27, 1912 (37 Stat. 240, c. 256), a claim for pay "such claimants as have presented *or the refund of the sum paid, to wit, $3,026.69, shall hereafter so present their claims, and was filed with the Commissioner of Internal shall establish such erroneous or illegal asRevenue, December 24, 1913, by H. T. New-sessment and collection, any sums paid by comb, representing himself to be the attorney for the New England Trust Company, trustee under the will of Dwight. And on December 30, 1913, Attorneys Lyon & Lyon, of Washington, D. C., acting for and in behalf of the administrator de bonis non of Edmund Dwight, filed with the Commissioner of Internal Revenue a claim for the refund of the tax. The grounds of both claims were that the tax was illegally and erroneously assessed and collected and contrary to the provisions of the act of 1898 and amendments and that the same should be refunded by virtue of the act of June 27, 1902 (32 *Stat. 406, c. 1160), and the act of July 27, 1912. The claims were rejected by the acting commis-quirements? sioner March 28, 1914. It is not shown that Mrs. Rand or any person acting for her or in her behalf filed a claim with the commissioner.

[1] The court, as we have said, dismissed the claim without considering the validity of the assessment. The conclusion is contested by appellant in an elaborate brief and defended by the government, relying primarily

them." There is no question that the cited sections remove the bar of sections 3226 and 3228 (Comp. St. §§ 5949, 5951) if appellant has met their requirements and presented to the Commissioner of Internal Revenue a claim for the refund of the tax. Nor is the fact that the tax was voluntarily paid, that is, without protest, an impediment to the application of the act of 1912. United States v. Hvoslef, 237 U. S. 1, 35 Sup. Ct. 459, 59 L. Ed. 813, Ann. Cas. 1916A, 286.

[2] It will be observed that the repayment is to be made to "such claimants as have presented or shall hereafter so present their claims." Has the appellant satisfied these re

Two claims were presented, one by the attorney of the trust company and one by attorneys acting for and in behalf of the administrator de bonis non of the estate of Edmund Dwight. Both claims were disallowed because, to quote the commission

er's letter:

The "tax was paid upon the absolutely vested interest of a stranger amounting to more than $25,000 and taxed at the legal rate of $7.50

#508

per $100 and accordingly, under the decision of the Supreme Court in the Knowlton and Fidelity Trust cases i all this tax was legally due." The first demand, it is said, "was presented by the testamentary trustee then holding

trust funds to the use of the claimant, and authorized and required to protect her interests under and in connection with the trust fund. The other claim was filed by

the personal representative of the decedent, successor to the executrix who had actually

made the payment, although such payment was at the cost of" Mrs. Rand. And it is

urged that

"The officers of the government were not misled at any time; there was no question as to the identity of the payment sought to be recovered or that of the person to whose benefit recovery would accrue."

within which claims could have been made and that the decisions rejecting them were several months afterwards, and she could not tion. If it be replied that she relied on the therefore have been influenced by the rejecrulings upon claims of the class to which not the trustee of the fund and the representhers belonged, the query occurs: Why did ative of the estate *rely on those rulings? Their relation to the taxes, whatever it was,

was not as intimate as hers and hers would seem to have called for more solicitude and a

demand by her as necessary as suit by her. It seems, therefore, that this suit is a postfact resolution and an experiment with the situation after the indulgent period of the statute. The act of 1912 cannot be made so compliant. It had its purpose and it is not satisfied by representative or negative a tion; it requires a positive and individual assertion of claim. The condition was easy of performance, its grant a concession, and there is no room for the plea to enlarge it be

liberal enough of itself. It says to the taxpayer: Make a claim for the tax you have paid, show its illegality, and it will be repaid to you. We cannot relax its requirements-certainly not on the assumption that they might have been useless if complied with.

We see no reason for granting the motion for further findings nor the motion for certiorari, and both are denied. Judgment affirmed.

(249 U. S. 517)

The demands, therefore, it is the further contention, satisfied the statute and should *be ascribed to Mrs. Rand, and that, the statute being remedial, its remedy is to be pro-yond its words. It is direct and clear and moted by a liberal construction, not impeded by a strict and technical one; and there are adduced statutes that have been liberally construed. Booth's Case, 49 Ct. Cl. 699; Newcomber v. United States, 51 Ct. Cl. 408. The inutility of another demand is emphasized, either for information to the department or for the assertion of her claim. She knew, it is said, the precise facts of the demands that had been made and she knew, besides, that claims of the class to which hers belonged had been uniformly rejected and that another claim in her own name would have been no less a "useless ceremony" than that which was declared in one of the cited cases. And she insists that such ceremony finds exemption in the case of Weaver v. Ewers, 195 Fed. 247, 115 C. C. A. 219. The case is not similar to that at bar. The tax there involved was paid under protest and there had (Argued March 25, 1919. Decided April 21, been an application in writing by the payer of it for a refund of the amount. The application was held to have satisfied section 3226 and that there was no necessity for another after the tax was paid. The case at bar does not present the same situation. Its railroads from using the same street for over Civ. Code Cal. § 499, prohibiting two street tax was paid without protest, and appellant five blocks, and a San Francisco city franchise seeks to avail herself of the act of 1912-containing similar provisions, held inapplicable not by performing its condition, but by as- to a municipal street railway system. serting an exemption from performance because of its supposed inutility. The government besides contests the sufficiency and sincerity of her excuse and points out that, not only does the record fail to show that the presented claims were made in her behalf, but that one of the claims was made eight days and the other two days before the time

1 Knowlton v. Moore, 178 U. S. 41, 20 Sup. Ct. 747, 44 L. Ed. 969: United States v. Fidelity Trust Co., 222 U. S. 158, 32 Sup. Ct. 59, 56 L. Ed. 137.

UNITED RAILROADS OF SAN FRANCIS-
CO v. CITY AND COUNTY OF SAN
FRANCISCO et al.

1919.) No. 282.

29 COMPETING

1. STREET RAILROADS
MUNICIPAL RAILROAD.

2. STREET RAILROADS 29
-SUBSEQUENT LEGISLATION.

FRANCHISE

to the risk that subsequent legislation and conA street railway took its franchise subject stitutional amendment might empower the municipality to establish its own street railway system.

3. EMINENT DOMAIN 2(1) WHAT CON-
STITUTES TAKING-STREET RAILWAY.
The establishment of a municipal street
railway system, which was not prohibited by

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

#519

518

plaintiff street railway's franchise, did not constitute a taking of its property, requiring a resort to eminent domain.

It

tiff upon the matter of law involved. then entered what is called a final decree denying all relief to the plaintiff with costs to 39(3) DETERMINATION OF the defendant. 239 Fed. 987. The present CASE-RIGHT TO DAMAGE. appeal is from that decree.

4. EQUITY

A bill to prevent the construction of a municipal street railway system will not be re tained to determine the question of damages against the city, under Const. Cal. 1879, art. 1, § 14, where more evidence would be required and the right to damages is at least doubtful; but the bill will be dismissed without prejudice to plaintiff's right to damages.

The franchise of the plaintiff to maintain, its two tracks on Market street was granted to its predecessor in title in September, 1879. At that time by section 499 of the Civil Code of California, "two corporations may be permitted to use the same street, each paying an equal portion for the construction of the track; but in no case must two railroad corACQUISITION porations occupy and use the same street or track for a distance of more than five blocks." The existence of this general law is the first ground relied upon for the assertion of exclusive rights in the street by

5. STREET RAILROADS 13 OR ESTABLISHMENT BY CITY. San Francisco City Charter, art. 12, § 2, requiring the municipality to consider offers to sell existing public utilities before constructing new ones, held sufficiently complied with where a general solicitation of offers for the sale the plaintiff. The other ground is the orof any existing street railway was sent to plain-der of the Board of Supervisors of San Francisco granting the franchise, and especially tiff street railway and others. section 5 which is as follows:

Appeal from the District Court of the United States for the Northern District of

California.

Bill by the United Railroads of San Francisco against the City and County of San Francisco and others. From a decree for defendants (239 Fed. 987), the plaintiff ap peals. Affirmed, as modified.

* Messrs. Garret W. McEnerney and Wm. M. Abbott, both of San Francisco, Cal., for appellant.

Messrs. Hiram W. Johnson and Thos. E. Haven, both of San Francisco, Cal., for appellees.

"It shall be lawful for the Board of Super

vigors of the city and county of San Francisco

to grant to one other corporation, and no more, the right to use either of the aforesaid streets for a distance of five blocks, and no more, after the forms and *conditions specified in the 499th section of the civil code of the State. This section shall apply to persons and companies, as well as corporations."

We agree with the District Court that these sections did not give to the plaintiff the right it claims.

[1-3] The section of the Code would seem to be a limitation of the powers conferred upon the Board of Supervisors by that and

Mr. Justice HOLMES delivered the opin- the adjoining sections, not a contract by ion of the Court.

This is a bill in equity brought by the appellant to prevent the construction of a municipal street railway on Market street and adjoining streets in San Francisco with tracks on the two sides of the plaintiff's double track, for more than five blocks, and also to prevent the inci*dental cutting of the plaintiff's tracks. The appellant claims the right by grant and contract to forbid the proposed action and relies upon the Constitution of the United States, upon the State Constitution which provides that private property shall not be taken or damaged for public use without just compensation having first been made, and upon Article XII, § 2, of the charter of the city, requiring it to consider offers for the sale of existing public utilities before constructing new ones. The answer denies that damage to the plaintiff will ensue from the new tracks and denies as matter of law that the plaintiff has the contract or property rights alleged. On application for a preliminary injunction the District Court held that the plaintiff had failed to make out a case for it, and denied it, intimating an opinion against the plain

the State, or an authority to the Board to
contract, against a larger use of the streets.
It most naturally is read as merely a gen-
eral law declaring the present legislative
policy of the State. Wheeling & Belmont
Bridge Co. v. Wheeling Bridge Co., 138 U.
S. 287, 292, 11 Sup. Ct. 201, 34 L. Ed. 967;
Williams v. Wingo, 177 U. S. 601, 20 Sup.
Ct. 793, 44 L. Ed. 906; Wisconsin & Mich-
igan Ry. Co. v. Powers, 191 U. S. 379, 387,
24 Sup. Ct. 107, 48 L. Ed. 229; San Jose-Los
Gatos Interurban Ry. Co. v. San Jose Ry.
Co., 156 Fed. 455, 458, 84 C. C. A. 265, 13
Ann. Cas. 571. But however this may be
neither that section nor section 5 of the
order granting the franchise purports in
terms to prevent the city from itself estab-
lishing a parallel road. If it be true, as the
plaintiff argues, that the grant or contract in
section 5 of the order means what the stat-
ute means and is to be construed by that,
we have suggested what seems to us the
natural construction of the act.
But in any
event it is decided by Knoxville Water Co.
v. Knoxville, 200 U. S. 22, 26 Sup. Ct. 224,
50 L. Ed. 353, that a covenant by a city
not to grant to any other person or corpora-

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

#522

+521

tion a privilege similar to that granted to, and if the crossings or the manner of operatthe covenantee does not restrict the city ing the parallel tracks should give or has from itself exercising similar power; and it given rise to any claim, the decree will be is assumed in that case, that the principle al- without prejudice to such claim. We asready is established as to legislative grants. sume in accordance with the plaintiff's evi200 U. S. 34, 26 Sup. Ct. 224, 50 L. Ed. 353. dence and argument that the damage may be That is the assumption also of an amend- considerable and we think it just to leave ment of section 499 by an Act of April 24, open whatever can be left open, but at pres1911. The city now is given power to es- ent we cannot say that the loss is or will tablish and operate transportation service by be of such a character that it must be paid the amendment of section 499 just mention- for, and we are satisfied that it is not such ed and by the Constitution of the State. as to call for equitable relief. Article 11, § 19. Amendment approved October 10, 1911. The plaintiff took the risk of the judicial interpretation of its franchise, and of this possible event. Madera Water Works v. Madera, 228 U. S. 454, 33 Sup. Ct. 571, 57 L. Ed. 915. Of course, so far as the harm to the plaintiff is an inevitable consequence of the city's doing what the plaintiff's franchise did not make it unlawful for the city to do, the infliction of that harm is not a taking of the plaintiff's property that requires a resort to eminent domain.

[4] We understand that the municipal road now has been built, and the question is whether to retain the bill for a claim of damages. But as that would require new evidence and practically would present a new case, and as further, with such light as we now have, the right to damages seems at least doubtful, we deem it sufficient if the rights of the plaintiff, if any, in that regard, are reserved. The question is raised pointedly by Article I, § 14, of the Constitution of 1879. That provides that "private property shall not be taken or damaged for public use without just compensation having first been made," etc. The plaintiff seems to argue that this section entitles it to preliminary compensation for any considerable pecuniary detriment that the City may inflict by the establishment of the new road, however lawfully it may act. Courts and Judges have differed widely in their interpretation of this class of provisions in statutes of different sorts; but we should suppose, until otherwise instructed by the Supreme Court of the State, that the damage referred to in this section of the State Constitution in the main would be damage resulting from conduct that, like taking, would be tortious unless in proceedings under eminent domain or some law authorizing it on condition that damages be paid.

[5] A general solicitation of offers for sale to the City of any existing street railway in San Francisco was passed by the Board of Supervisors and was ordered to be sent and was sent to the plaintiff, among others. We agree with the District Court that Article XII, § 2, of the City Charter does not better the plaintiff's case.

Decree affirmed without prejudice to further proceedings to recover any damages to which the plaintiff may be entitled.

[blocks in formation]

4. FOOD 8
SPECTION Аст.

TRADE-NAME

MEAT IN

As to crossing the plaintiff's tracks we are inclined to agree with the District Court that the plaintiff's franchise must be underEvidence that the trade-name "Creamo Olestood to be subject to this incident and that omargarine" was sanctioned by the Secretary a taking by eminent doman was not nec- of Agriculture under the meat inspection acts essary. Market Street Railway Co. v. Cen- of June 30, 1906 (Comp. St. § 8682) and March tral Ry. Co., 51 Cal. *583; Consolidated Trac-4, 1907 (section 8681), when the producer was tion Co. v. South Orange & Maplewood Traction Co., 56 N. J. Eq. 569, 574, et seq., 40 Atl. 15; 3 Dillon, Municipal Corporations (5th Ed.) § 1241, p. 1983. If we are wrong

using 30 per cent. cream, but that such sanction was withdrawn when cream was no longer used, does not establish an arbitrary action by the Secretary, although the producer offered to use 10 per cent. cream.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexse

« ΠροηγούμενηΣυνέχεια »