Graham & Foster v. Goodcell, 282 U.S. 409 (1931)
Graham & Foster v. Goodcell
No. 36
Argued December 8, 9, 10, 11, 1930
Decided January 26, 1931
282 U.S. 409
CERTIORARI TO THE CIRCUIT COURT OF APPEALS
FOR THE NINTH CIRCUIT
Syllabus
1. Section 607 of the Revenue Act of 1928 provides that a tax assessed or paid after the expiration of the period of limitation applicable thereto shall be considered an "overpayment," and shall be credited or refunded to the taxpayer if claim therefor is duly filed. Section 611 enacts a qualification by providing that, in stated circumstances, the payment of the tax shall not be considered an overpayment under the provisions of § 607. These circumstances are (a) an assessment of the tax within the time applicable thereto and before June 2, 1924, (b) the filing of a claim in abatement, (c) the stay of the collection of any part of the tax, and (d) the payment of such part of the tax before, or within one year after, the enactment of the Act of 1928. This legislation was occasioned by the fact that applications to abate assessments, and the Treasury Department’s mistaken view that the time limit on collection did not apply to collection by distraint, had led in many cases to delays of collection beyond the statutory period, and it was the general purpose of Congress that large amounts so collected, in the circumstances described in § 611, should not be refunded.
Held:
(1) Section 611 applies retroactively to claims for refunds filed before the enactment of the statute. P. 418.
(2) Section 611 applies to involuntary, as well as to voluntary, payments by taxpayers. P. 420.
(3) The "stay" of collection contemplated by § 611 includes a postponement not required by statute or judicial order, but voluntary on the part of the Treasury. P. 421.
(4) The fact that a claim in abatement was rejected before the period of limitation on collection had expired did not remove the case from the purview of § 611. P. 422.
(5) Sections 607 and 611 do not relate solely to administrative action, and the latter section prevents refunds, in the circumstances therein stated, whether the claim therefor be asserted before the Department or in the courts. P. 423.
(6) Section 611 cannot be construed as inapplicable to a tax payment merely because a suit to recover it was pending when the statute was enacted. There is no distinction in this respect between suits pending against the Collector and those pending against the United States. P. 424.
(7) This section applies where the tax was paid by crediting an overpayment for another taxable year. P. 424.
(8) The general rule that it is inconsistent with due process to take away by statute, from a private party, a right to recover an amount due when the statute is passed does not apply to the cases covered by § 611. P. 426.
(9) Where a private right to recover money from the government is without substantial equity, and arose out of a mistake of government officers in administering the law, a statute curing the defect of administration, and thereby destroying the cause of action, is not unconstitutional. P. 427.
(10) Section 611 is not arbitrary or capricious in its classification. P. 431.
(11) The section precludes recovery of interest, as well as principal. P. 432.
2. Section 3220, Rev.Stats., which authorized the Commissioner of Internal Revenue to remit and refund taxes erroneously or illegally assessed or collected, etc., having been amended by the Revenue Act of 1926 so as to except cases provided for by parts of that Act which placed limitations on credits and refunds, was amended by the Revenue Act of 1928, § 619(b), by striking out this exception and inserting in lieu thereof "except as otherwise provided by law in the case of income, war-profits, estate and gift taxes." Another Act (May 29, 1928, c. 901, 45 Stat. 883), amending § 3220, Rev.Stats. and omitting this exception, was approved on the same day as the Revenue Act of 1928.
Held:
(1) That there was no repeal by implication of § 611 of the Revenue Act of 1928, dealing with refunds, which established a special rule for a particular situation in pursuance of a policy deliberately adopted by Congress. P. 424.
(2) The principle that repeal of one statutory provision by another will not be implied unless there is positive repugnancy between them applies especially to revenue laws, and the presumption against such repeal is strongest when the two Acts were passed at the same session and on the same day. P. 425.
35 F.2d 586; 42 id. 235; 43 id. 679; 43 id. 683; 45 id. 75; 68 Ct.Cls. 539; 69 id. 764; 69 id. 745; 70 id. 272, affirmed.
Certiorari to review judgments in nine cases involving questions as to the effect and validity of § 611 of the Revenue Act of 1928. The suits were instituted by the taxpayers to recover involuntary payments in all these cases. In Nos. 36 and 529, judgments of the district courts favorable to the taxpayers were reversed in the circuit courts of appeals; in Nos. 463 and 565, judgments of the district courts, 36 F.2d 373; 34 F.2d 328, against the taxpayers were affirmed in the circuit courts of appeals; and in No. 519, the judgment of the district court, 42 F.2d 235, was against the taxpayer, and the record was brought up from the circuit court of appeals before hearing in that court. In Nos. 104, 105, 323, and 337, judgments of the Court of Claims were against the taxpayers. The orders granting certiorari will be found in 281 U.S. 708, 717, and in the latter part of this volume.