United States v. Kansas Flour Mills Corp., 314 U.S. 212 (1941)

United States v. Kansas Flour Mills Corporation

No. 45

Argued November 21, 1941
Decided December 8, 1941
314 U.S. 212

CERTIORARI TO THE COURT OF CLAIMS

Syllabus

Contracts for the purchase of flour by the Government included as part of the price any federal tax theretofore imposed by Congress applicable to the material purchased, and provided that, if any processing or other tax were imposed or "changed by Congress" after the date set for opening of bids and were paid to the Government by the contractor on the supplies contracted for, then the price would be "increased or decreased" accordingly. Held, that the subsequent decision in United States v. Butler, 297 U.S. 1, adjudging the processing tax void, and the recognition of that holding through provisions of the Revenue Act of 1936, amounted to a "change" of the vendor’s tax liability made "by Congress," within the meaning of the contract, and that amounts paid by the Government as part of the contract price to offset processing taxes presumptively payable by the vendor but which, because of that decision the vendor escaped, were recoverable by the United States. P. 217.

92 Ct.Cls. 390, reversed.

Certiorari, 313 U.S. 554, to review a decision of the Court of Claims awarding damages to the flour mills company on a contract for the sale of flour and bran, and denying the right of the United States to offset payments made by it on earlier contracts to cover processing taxes which were subsequently held to be unconstitutional so that the vendor was not obliged to pay them.