U.S. Supreme Court
Stotesbury v. United States, 146 U.S. 196 (1892)
Stotesbury v. United States
Argued November 11, 1892
Decided November 21, 1892
146 U.S. 196
A decision by the Commissioner of Internal Revenue on an application for the refunding of taxes collected, authorizing the same to be refunded, which was made under the authority conferred upon him by the Act of July 13, 1866, c. 184, § 9, 14 Statutes, pages 98, 109, 111, Rev.Stat. § 3220, and was reported to the Secretary of the Treasury for his consideration and advisement July 26, 1871, under the Treasury Regulations then in force, is held by the Court not to have been a final decision, but to have been subject to revision by the secretary and to be returned by him to the successor of the Commissioner for reexamination.
On December 19, 1870, the firm of Harris & Stotesbury appealed to the Commissioner of Internal Revenue for the refunding of $67,335.85, internal revenue taxes claimed to have been erroneously assessed and collected from them. This claim was examined and rejected, and notice thereof given to the claimants. An application for a rehearing was made and sustained. On July 26, 1871, the Commissioner, having examined the claim, signed and transmitted to the Secretary of the Treasury the following schedule:
"No. 99 -- A schedule of claims for the refunding of taxes erroneously assessed and paid, which have been examined and allowed, and are transmitted to the Secretary of the Treasury for his consideration and advisement in accordance with regulations dated January 12, 1866."
"I hereby certify that the foregoing claims for the refunding of taxes erroneously assessed and paid have been examined and allowed, and are transmitted to the Secretary of the Treasury for his consideration and advisement."
"A. PLEASONTON, Commissioner"
On August 8, 1871, Commissioner Pleasonton resigned, and on the next day J. W. Douglass, having been duly appointed his successor, entered upon the discharge of the duties of the office. On that day the Secretary of the Treasury sent to him this letter:
"Washington, D.C. August 9, 1871"
"Sir: The enclosed refunding claims of Harris & Stotesbury and Harris, Heyle & Co., transmitted by your predecessor to this office for approval, would seem to have been passed by a reversal of the construction of the law relative to sugar manufactures which obtained during the whole period of its existence."
"Under these circumstances, I deem it proper to return them to you for reexamination, declining to consider them unless again submitted by your office."
"GEO. S. BOUTWELL"
"Secretary of the Treasury"
"Hon. J. W. Douglass, Com'r of Int. Revenue"
And on the 9th of November, 1871, the Commissioner endorsed on the claim these words: "November 9, 1871. Rejected on reexamination. J. W. Douglass, Commissioner," notice of which action was duly given to the claimants. On the wrapper or jacket enclosing the papers in this claim appear the following endorsements:
"(Office of Internal Revenue. Rec'd Dec. 19, '70. Div. 1, sec. 3.)"
"Coll'r not'd Dec. 20, '70. J. D. 3395."
"Wrote claimants Nov. 13, '71. J. D."
"12, 21, '70."
"(46) Claim for refunding taxes collected."
"Serial No. 18. No. of draft, ___, $67,335.85."
"Harris & Stotesbury, claimant ___."
"Post office address, Philadelphia."
"Verified by ___ W. J. POLLOCK, Collector"
"1 district of Penna. "
"Assessed upon sp. tax sugar refiners."
"Basis of claim: Claims that they do not refine sugar."
"Nov. 9, 1871, rejected on reexamination."
"[Signed] J. W. DOUGLASS, Comm'r"
"Examined and rejected Dec. 19, 1870, by _______"
"[Signed] CHS. CHESLEY"
"Allowed by Commissioner, July 26, 1871."
"[Signed] A. PLEASONTON"
No notice was given to the claimants of the action of Commissioner Pleasonton, and it does not appear that they were aware of it until 1880, when, on being informed thereof, they made application for the payment of the money as having been duly allowed them by such decision of Commissioner Pleasonton. This application was denied, but the question of the liability of the government was transmitted by the Secretary of the Treasury to the Court of Claims. A petition in that court was filed in the name of Thomas P. Stotesbury, sole surviving partner of Harris & Stotesbury, and afterwards, on his death, the suit was revived in the name of the present appellants, his executors. The decision was in favor of the government, 23 Ct.Cl. 285, from which decision the executors brought this appeal.