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or before any other court of competent jurisdiction. And taxes may be sued for and recovered, in the name of the United States, in any proper forin of action before any circuit or district court of the United States within which the liability to such tax may have been or shall be incurred, or where the party from whom such tax is due may reside at the time of the commencement of said action. But no such suit shall be commenced unless the Commissioner of Internal Revenue shall authorize or sanction the proceedings.".
With the greatest respect for the eminent jurist who wrote the opinion in the Savings Bank Case, we submit that what is said in the course of the opinion respecting the exemption of the general government from established recognized common-law rights of action and limitations upon the character of action permissible to it, respecting its right to treat a tax as a debt recoverable in the form of assumpsit indebitatus, was quite obiter dictum, as the statute imposing the tax in question expressly declared that it could be recovered by suit at law, and as disclosed in the facts of the case the Commissioner of Internal Revenue had sanctioned the proceeding. The statute itself was an all-sufficient authority for the maintenance of the suit. The tax itself became a charge upon a particular fund, payable in inoney, directly to the collector of internal revenue, and possessed none of the qualities of a duty to be paid in stamps. In view of the express provision of the statute providing for the recovery of such a tax by suit, it ought not to be said that it was the mind of the court in the Savings Bank Case to overturn the hitherto generally recognized rule of law that a tax is not regarded as a debt. In Lane County v. Oregon, 7 Wall. 71, 79, 80, 87, 19 L. Ed. 101, the Chief Justice, delivering the unanimous opinion of the court, speaking of the clause of the Constitution giving to Congress the power to lay and collect taxes, said:
"What, then, is its true sense? The most obvious, and, as it seems to us, the most rational, answer to this question, is that Congress must have had in contemplation debts originating in contract or demands carried into judg. ment, and only debts of this character. This is the commonest and most natural use of the word. Some strain is felt upon the understanding when an attempt is made to extend it so as to include taxes imposed by legislative authority, and there should be no such strain in the interpretation of a law like this. We are more ready to adopt this view, because the greatest of English elementary writers upon law, when treating of debts in their various descriptions, give no hint that taxes come within either, while American state courts of the highest authority have refused to treat liabilities for taxes as debts, in the ordinary sense of that word, for which actions of debt may be maintained.”
Then, quoting from City of Camden v. Allen, 26 N. J. Law, 398:
“A tax, in its essential characteristics, is not a debt, nor in the nature of a debt. A tax is an impost levied by authority of government upon its citizens, or subjects, for the support of the state. It is not founded on contract or agreement. It operates in invitum.. A debt is a sum of money due by certain and express agreement. It originates in and is founded upon contracts, express or implied.”
In Meriwether v. Garrett, 102 U. S. 472, 26 L. Ed. 197, the opinion was written by Mr. Justice Field, who dissented in the Savings Bank Case, supra. He asserted broadly that:
"Taxes are not debts. It was so held by this court in the case of Oregon v. Lane County, reported in 7 Wall, 71, 19 L. Ed. 101.”
It is true that that was not a suit either by the United States or by the state of Tennessee; but it was the assertion of the sovereignty of the state through the legislative authority, and the whole reasoning of the court was that both the levying and collecting of the tax are legislative matters, and are not judicial, and therefore he said:
"Having the sole power to authorize the tax, it must equally possess the sole power to prescribe the means by which the tax shall be collected and to designate the officers through whom its will shall be enforced.
In the distribution of the powers of government in this country into three departments, the power of taxation falls to the legislative."
It is a significant fact that in the dissenting opinion Mr. Justice Strong, who wrote the opinion in the Savings Bank Case, reasserted that:
"By the lawful assessment and levy of a tax the taxpayer becomes a debtor to the municipality, and the debt may be recovered, like other debts, by a suit at law, or, when it is a lien, by a bill in equity."
In Thompson v. Allen County (C. C.) 13 Fed. 99, Mr. Justice Matthews, referring to the Meriwether Case, said:
“I am constrained to conclude that it was decided by the spirit and logic of that case that the collection of a public tax as much belongs to the authority of the state as its levy and assessment, and the reasons which forbid a court to supply the latter apply with equal force to the former.”
In Crabtree v. Madden, 54 Fed. 426, 4 C. C. A. 408, the tax sought to be collected was imposed by the Indian tribes. This court, speaking through Judge Sanborn, after asserting that the authority imposing the tax had equal power to prescribe the remedies and designate the officers to collect it, asserted the proposition that actions at law for the collection of taxes, as a rule, are unauthorized, and that the general rule is that where remedies are provided, and such an action is not named as one of them, a common-law action to recover the tax would not lie, even in the courts of the sovereignty which had imposed them. He further said:
"The counsel for plaintiffs attempts to escape this conclusion by the argument that this tax is a debt; that it arises upon an implied contract; that the court has jurisdiction to enforce such contracts, and hence of this action. This position is not tenable. Taxes are not debts. They do not rest upon contract, express or implied. They are imposed by the legislative authority, without the consent and against the will of the persons taxed, to maintain the government, protect the rights and privileges of its subjects, or to accomplish sonie authorized special purpose. They do not draw interest, are not subject to set-off, and do not depend for their existence or enforcement upon the individual assent of the taxpayers."
It may be conceded that a tax imposed in favor of the government, whether by assessments or other means, having been ascertained, so as to become fixed either as a lien on specific property or as a claim in personam, no matter what technical name may be given to the suit, the government would be afforded a remedy through its courts for the enforcement of its payment, unless it appears from the statute that in respect of the particular tax it was not contemplated that it should be collected by a suit at law. As a means for the enforcement of the purchase of the tax stamps, which was the only mode of payment prescribed by the act, the statute subjected the derelict to prosecution as a misdemeanant and to a fine of $100, and in addition thereto it disentitled the deed to admission of record under the recording statutes of the state and rendered it inadmissible in evidence in the courts. On the face of the act these penalizing provisions were deemed by Congress as far as it cared to go toward the enforcement of the payment of this tax.
It is not persuasive to say that the penalty and disqualifying incidents imposed might not be effective to compel the purchase of a large amount of stamps. While the penal sum imposed as a fine or the imprisonment might not be a sufficient deterrent against evasions of the tax, the scandal of a conviction under indictment or criminal information and the other consequences attached for the nonaffixing of the stamps were most serious. The nonadmission of the deed of conveyance as a muniment of title might be most disastrous to the grantee in the event of the interposition of the creditors of the grantor or subsequent grantees or mortgagees. In the event of a judicial inquiry, where the rights of the grantee were at issue, the inadmissibility of his deed in evidence, for the lack of stamps, might be ruinous to him. It is sufficient, however, to say that Congress in framing the statute deemed the liabilities and disabilities imposed adequate enough to enforce compliance. The judicial branch of the government has no right to challenge the legislative discretion. The established rule of the common law is that where a legislative act creates a new right, or imposes a new burden, and specifies certain remedies in the form of penalties and the like, the prescription is exclusive of any other remedy.
It is a noteworthy fact that in the matter of "Legacies and Distributive Shares of Personal Property” (pages 798, 799, of the act of 1898), where the tax is ascertained from schedules and constitutes a lien upon the decedent's estate, on refusal of the administrator or executor to pay, it is provided that:
“The collector shall commence appropriate proceedings before any court of the United States, in the name of the United States, against such person or persons as may have the actual or constructive custody or possession of such property or personal estate, or any part thereof, and sball subject such property or personal estate, or any portion of the same, to be sold upon the judgment or decree of such court,” etc.
No like provision was made in respect of the failure to place upon any written instrument the required stamps.
The contention on behalf of the government is that this suit is maintainable by reason of section 31 of the act, which declares that:
"All administrative, special or stamp provisions of law, including the laws in relation to the assessment of taxes, not heretofore specifically repealed, are hereby made applicable to this act.”.
In order to make said section effective to the end desired, it is further claimed that it had reference to and incorporated into the statute the provisions of section 9 of the internal revenue act of 1866, authorizing suit by the government to recover taxes (which has hereinbefore been quoted), which now constitutes section 3213, Rev. St U. S. 1878. This, it must be conceded, would be a remarkable extension of the ordinary import of the terms and words employed in said section 31. _It occurs under the heading “Legacies and Distributive Shares of Personal Property,” declaring that estates in descent and distribution shall be taxed, and providing the amount and the manner of ascertaining the same. As the stamp tax in respect of deeds of conveyance imposed by the war revenue acts of 1864 and 1866 were repealed by Act June 6, 1872, c. 315, 17 Stat. 256, the term "stamp provisions" could have no reference to provisions pertaining to stamps on deeds of conveyance, for those had been "heretofore specially repealed.” But there were “laws in respect to the assessment of taxes” which had not hitherto been repealed, such as inheritance taxes, legacies, and personal property, and assessments on incomes.
The term “special”—that is, special provisions of law-certainly did not point out said section 3213, Rev. St. 1878, supra, as that is a general law applicable to all taxes collectible by suit. Its natural import is that it refers to some special provisions of some act which might not have been specified in the particular act. But it can have no reference to provisions respecting the payment of taxes by stamps, as the act of 1898 presents a plenary system, with definite details as to the manner of their payment, and prescribes the remedy for its enforcement.
The only remaining term, therefore, in section 31, upon which the government's contention can be hung, is the word “administrative." The ordinary, common acceptation of this term is that it pertains to matters that are ministerial, administrative, or executive. An assessment might, with admissible propriety, imply a mere ministerial act; but the specification in the section of “laws in relation to the assessment of taxes" clearly enough indicates that in the judgment of Congress the word "administrative" was not sufficient to comprehend an assessment. The omission of the word "collection,” which is so closely allied to and usually follows an assessment, would indicate that it was purposely omitted. In any event, the term “collection” is not expressed, and the court has no authority to read it into the statute.
There is another persuasive, if not conclusive, fact that it was not the mind of Congress that a suit could be maintained for the recovery of taxes growing out of a failure to put the required revenue stamps on a deed or other written instrument. Act April 12, 1902, c. 500, $ 7, 32 Stat. 97 [U. S. Comp. St. Supp. 1907, p. 616), expressly repeals the act of 1898 requiring deeds of conveyance to be stamped and fixing the amount thereof, and it also expressly repealed section 29 of the act of 1898 respecting legacies and distributive shares of personal property. But this was qualified by the provision (section 8):
"That all taxes or duties imposed by section 29 of the act of June 13, 1898, and amendments thereof prior to the taking effect of this act, shall be subject, as to lien, charge, collection, and otherwise, to the provisions of section 30 of the act of June 13, 1898, and amendments thereof, which are hereby continued in force."
It then recopied said section 30, providing for the manner of assessments and the legal procedure to recover that tax by suit. The failure of Congress to make a like reservation in respect of the enforcement of the collection of taxes under the stamp act furnishes, to our minds, an irrefragable argument against the contention of the government.
Suggestive argument is furthermore furnished by reference to other statutes in pari materia respecting tax stamps to be placed on certain packages and articles. Take the act imposing a tax upon the sale, etc., of "filled cheese” (Act June 6, 1896, 29 Stat. 255, c. 337 (U. S. Comp. St. 1901, p. 2239]). Section 10 provides that, whenever any manufacturer sells or removes for sale any filled cheese upon which the tax is required to be paid by stamps without paying such tax, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more than two years after such sale or removal, upon satisfactory proof, to estimate the amount of tax which has been omitted to be paid and to make an assessment therefor and certify the same to the collector. "The tax so assessed shall be in addition to the penalties imposed by law for such sale or removal." Section 17 provides:
"That all fines, penalties, and forfeitures imposed by this act may be recovered in any court of competent jurisdiction."
While the act for the enforcement of the payment of this stamp duty provides penalties and forfeitures, in order that that should not be regarded as the only remedy for the enforcement of the tax, the statute expressly declares that the tax shall be in addition to the penalties imposed by law for such failure, and consequently could be recovered by suit under said section 3213, supra.
Act June 13, 1898, c. 448, 30 Stat. 448, 468 (U. S. Comp. St. 1901, p. 2286], providing for the payment of taxes on mixed flour, declares that "the tax levied by this section shall be represented by coupon stamps,” and that the Commissioner of Internal Revenue, for a period of not more than one year after such sale, consignment, or removal, is to estimate the amount of the tax which should have been paid, make an assessment therefor, and certify the same to the collector of the proper district. “The tax so assessed shall be in addition to the penalties imposed by this act for an unauthorized sale or removal," with a further provision “that all fines, penalties, and forfeitures imposed by the section specified may be recovered in any court of competent jurisdiction."
So Act Aug. 27, 1894, c. 349, 28 Stat. 562 [U. S. Comp. St. 1901, p. 2275], declares that, whenever any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale by the manufacturer thereof without the use of the proper stamp, in addition to the penalties imposed by law for such sale or removal, it shall be the duty of the Commissioner of Internal Revenue, within a period of not more than two years after such sale or removal, to estimate the amount of the tax which has been omitted to be paid, and to make an assessment therefor upon the manufacturer or producer of such article, the amount to be certified to the collector, who shall demand payment of such tax, “and upon the neglect or refusal of payment by such manufacturer or producer, shall proceed to collect the same in the manner provided for the collection of other assessed taxes."