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pealed, claiming they should be classified, under paragraph 148, as *Castings of iron not specially provided for."
We find no error in the Circuit Court's decree. While a cast-iron article always remains a casting of iron, no matter to what further process it may be subjected, and so falls under the general term of castings of iron, yet, under the proofs in this case, we are clear that these standards and bed plates are not "castings of iron not specially provided for” in the tariff law, but fall within the letter and spirit of section 193 as being articles composed wholly of iron partly manufactured. They were found by the board to be "parts of the machines of which they formed integral parts and in the values of which their values are included." They were cast by patterns and drawings to form parts of a machine; the standards were drilled to receive shafts and to provide for bolting to the plates; and the plates were cut or machined across their faces to level them as standard seats. Holes were drilled and threaded in the plates so as to align with the bolts of the standards, and other holes were drilled, through which the machine as a whole was clamped to the floor. Indeed, the testimony on behalf of the importer shows:
“The order for the machinery is given and all these articles are supposed to come to complete the machine.” The work in this country is to "just fit and level them up.” “No boring is done here.” They are "all fitted and ready to be put up.” “The exhibit belongs to the finished castings class.”
In view of the careful work thus expended on them to fit them as parts of valuable machines, we are clear their character as mere castings had merged into the higher mechanical plane of a manufactured article.
The appeal is dismissed.
(156 Fed. 959.)
MASON et al. v. CHICAGO, B. & Q. RY. CO.
(Circuit Court of Appeals, Seventh Circuit. October 9, 1907. Rehearing De
nied November 19, 1907.)
No. 1,330. CORPORATIONS-SALE OF STOCK.
The acceptance by defendant of a written offer by plaintiffs, who were brokers, to sell certain stock and bonds of a railroad company, which offer was expressly stated therein to be made by authority of a third person named who controlled such stock and bonds, did not create a contract of sale between plaintiffs and defendant which would support an action by plaintiffs on defendant's refusal to accept and pay for the securities from them, and its purchase of the same direct from their prin
cipal. In Error to the Circuit Court of the United States for the Eastern Division of the Northern District of Illinois.
Merritt Starr, for plaintiffs in error.
BAKER, Circuit Judge. Plaintiffs in error, plaintiffs below, were defeated by the court's giving a peremptory instruction to the jury to return a verdict for defendant.
The general situation out of which this controversy arose was shown by undisputed evidence to be this: Dunn, at Philadelphia, had in his control, with authority to sell, practically all the stocks and bonds of a small railway in Illinois. Defendant wanted to buy the road. Plaintiffs were brokers at Chicago. After communications between plaintiffs and Dunn, plaintiffs made a proposal to defendant that it should buy the stocks and bonds at certain prices. Defendant accepted, but later refused to have anything further to do with plaintiffs, and purchased the stocks and bonds directly from Dunn.
The declaration consisted of the common and four special counts. It is unnecessary to note the divergences of the special counts. They agreed in the foundational and characteristic averment that the parties had entered into a contract whereby plaintiffs had covenanted to sell to defendant and defendant to buy from plaintiffs the stocks and bonds. The evidence in support of the alleged contractual relation between these parties was in the form of letters. Plaintiffs wrote to defendant:
"Ws are advised by J. H. Dunn, president of J. & St. L. R. R., that the securities covering the property are as follows
and that he has re ceived from the owners of the above securities consents to sell the following
which we are authorized to offer on the following terms.
Defendant answered: "We will accept the offer of the securities of the J. & St. L. made by you."
Plaintiffs did not offer to sell on their own account. They merely covenanted that they had authority to offer to sell. In our judgment the trial court did not err in holding that this evidence failed to support the above-mentioned averment of the special counts.
The common count for goods sold and delivered is without support in the evidence. There was no express contract of sale by plaintiffs as sellers; and no contract between plaintiffs as sellers and defendant as buyer can be implied from defendant's receipt of the stocks and bonds, for they were taken directly from Dunn, as Dunn's, on Dunn's account, and in pursuance of a separate contract with Dunn.
If anything is owing to plaintiffs for services rendered, they must pursue some one else, for there is no evidence whatever to sustain that count against defendant.
The trial was not stopped at the close of plaintiffs' evidence in chief, and numerous assignments of error are predicated on rulings respecting the admission and exclusion of evidence during defense and rebuttal, and concerning the rejection of proffered instructions. As plaintiffs legally had no standing in court when their declaration was left unproven, the other proceedings are of no concern.
The judgment is affirmed.
(156 Fed. 881.)
UNITED STATES V. CHAMBERLIN et al.
No. 2,422. 1. INTERNAL REVENUE_STAMP TAXES ON WRITTEN INSTRUMENTS - MODE OF
The United States cannot maintain an action of debt for the recovery of stamp taxes owing on a deed of conveyance under War Revenue Act June 13, 1898. c. 448, § 25, Schedule A, 30 Stat. 457 [U. S. Comp. St. 1901, p. 2299), by reason of the failure to affix the required stamps thereto. There being no express authority in the statute for such a proceeding, the means of enforcing payment of the tax are limited to the penal pro
visions contained therein. 2. TAXATION—“DEBT” DEFINED_TAXES Not DEBTS.
A tax is not a "debt" within the ordinary meaning of the term, nor in such sense that an action of indebitatus assumpsit may be maintained for its collection, unless expressly authorized by statute.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 45, Taxation, 8 1185.
For other definitions, see Words and Phrases, vol. 2, pp. 1864–1887; vol. 8, p. 7628.]
Hook, Circuit Judge, dissenting. In Error to the District Court of the United States for the District of Colorado.
Ralph Hartzell, Asst. U. S. Atty. (Earl Cranston, U. S. Atty., and Ernest Knaebel, Sp. Asst. U. S. Atty., on the brief), for plaintiff in error.
O. L. Dines (E. E. Whitted, on the brief), for defendants in error.
Before SANBORN and HOOK, Circuit Judges, and PHILIPS, District Judge.
PHILIPS, District Judge. In 1905 the plaintiff in error, the United States of America, instituted this suit in the United States District Court for the District of Colorado, to recover of the defendants in error, as executors of the will of Winfield Scott Stratton, the sum of $4,883, the amount of revenue stamps alleged to be owing by said estate on a deed of conveyance made by said Stratton on the 23d day of May, 1899, conveying to Stratton's Independence Limited, a corporation, certain mining property located in the Cripple Creek mining district of Colorado. T'he petition alleged that the consideration expressed in the deed was $4,850,000, on which revenue stamps were placed amounting to $4,850; whereas, the true and actual consideration for the conveyance was $9,733,000, leaving the amount of stamps due $1,883. The court below sustained a demurrer to this petition. To reverse this judgment the United States prosecutes this writ of error.
The question for decision is, can the government maintain the action of indebitatus assumpsit for the recovery of such tax? The tax claimed arose under what is popularly known as the “Spanish War tax," provided for by Act Cong. June 13, 1898, c. 448, 30 Stat. 448 (U. S. Comp. St. 1901, p. 2284 (2 Supp. Rev. St. No. 8, 1897–1899)]. Under Schedule A it is provided that on a deed conveying lands, tenements, or other realty, "the purchaser or purchasers, or any other person or persons, by his, her, or their direction, when the consideration or value exceeds one hundred dollars and does not exceed five hundred dollars,” shall place a stamp of 50 cents, and for each additional $500 or fractional part thereof in excess of $500, 50 cents. Section 25 of the act provides:
"That the Commissioner of Internal Revenue shall cause to be prepared for the payment of the taxes prescribed in this act suitable stamps denoting the tax on the document, article or thing to which the same may be affixed.".
The act specifies what the penalty and consequences shall be for a failure to attach to the instrument the required stamps. Section 7 declares:
"That if any person or persons shall make, sign, or issue, or cause to be made, signed, or issued, any instrument, document, or paper of any kind or description whatsoever, without the same being duly stamped for denoting the tax hereby imposed thereon, or without having thereon an adhesive stamp to denote said tax, such person or persons shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not more than one hundred dollars, at the discretion of the court, and such instrument, document, or paper, as aforesaid, shall not be competent evidence in any court."
“That if any person or persons shall make, sign, or issue, or cause to be made, signed, or issued, or shall accept or pay, or cause to be accepted or paid, with design to evade the payment of any stamp tax, any bill of exchange, draft, or order, or promissory note for the payment of money, liable to any of the taxes imposed by this act, w
same being duly stamped, or having thereupon an adhesive stamp for denoting the tax hereby charged thereon, he, she, or they shall be deemed guilty of a nisdemeanor, and upon conviction thereof shall be punished by a fine not exceeding two hundred dollars, at the discretion of the court."
Section 13: "That any person or persons who shall register, issue, sell, or transfer, or who shall cause to be issued, registered, sold, or transferred, any instrument, document, or paper of any kind or description whatsoever mentioned in Schedule A of this act, without the same being duly stamped, or having thereupon an adhesive stamp for denoting the tax chargeable thereon, and canceled in the manner required by law, with intent to evade the provisions of this act, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding fifty dollars, or by imprisonment not exceeding six months, or both, in the discretion of the court; and such instrument, document, or paper, not being stamped according to law, shall be deemed invalid and of no effect. [The proviso of this section authorizes the subsequent validation of the instrument by placing the stamps thereon.) But no right acquired in good faith before the stamping of such instrument, or copy thereof, as herein provided, if such record be required by law, shall in any manner be affected by such stamping as aforesaid."
"That hereafter no instrument, paper, or document required by law to be stamped, which has been signed or issued without being duly stamped, or with a deficient stamp, nor any copy thereof, shall be recorded or admitted, or used as evidence in any court until a legal stamp or stamps, denoting the amount of tax, shall have been affixed thereto, as provided by law.
"That it shall not be lawful to record or register any instrument, paper, or document required by law to be stamped unless a stamp or stamps of the proper amount shall have been atfixed and canceled in the manner prescribed by law; and the record, registry, or transfer of any such instruments upon which the proper stamp or stamps aforesaid shall not have been alfixed and canceled as aforesaid shall not be used in evidence."
These are the only provisions of the statute respecting the manner of obtaining the revenue from such conveyances, and they contain the only remedial provisions for the enforcement of payment. The language of section 25 clearly enough indicates that “the payment of the taxes prescribed in this act" shall be by "suitable stamps denoting the tax on the document,” etc. These were to be prepared by the Commissioner of Internal Revenue, and when bought from the local collector they were to be affixed to the instrument by the vendor or the vendee. No antecedent assessment was provided for or contemplated in respect of this character of tax.
Reliance for the enforcement of the payment of the tax claimed in this case as a debt owing to the government is placed principally upon the decision in Savings Bank v. United States, 19 Wall. 227, 22 L. Ed. 80. The tax in that case was based upon Internal Revenue Act July 13, 1866, c. 184 (14 Stat. 98), which levied a tax of 5 per cent. on bank dividends. The tax was to be paid in money by the bank on the stock of the shareholder. The list or return was required to be made and rendered to the assessor by the bank on or before a given date, in which any dividends or sums of money became due or payable, and the president, cashier, or treasurer of the bank was required to annex thereto a declaration, under oath, in form and manner as prescribed by the Commissioner of Internal Revenue, that the same contained a true and faithful account of the taxes aforesaid; and for any default in making or rendering such list or return, with such declaration annexed, the defaulting bank should forfeit as a penalty the sum of $1,000, and for failure to make or render the list or return, or for any default in the payment of the tax as required, the assessment and collection of the tax and penalty shall be in accordance with the general provisions of law in other cases of neglect and refusal. From which it is apparent that the amount of the tax to be paid was assessed on a particular fund—a dividend in favor of an ascertained beneficiary—and payment of the amount so assessed was to be made in money by the bank to the collector of internal revenue. While the act provides for the imposition of a penalty in the nature of a forfeiture, on default of the bank in performing the duties imposed upon it, the act went further and expressly declared:
"That it shall be the duty of the collectors aforesaid, or their deputies, in their respective districts, and they are hereby authorized, to collect all the taxes imposed by law, however the same may be designated, and to prosecute for the recovery of any sum or sums which may be forfeited by law; and all fines, penalties, and forfeitures which may be incurred or imposed by law, shall be sued for and recovered, in the name of the United States, in any proper form of action, or by any appropriate form of proceeding, qui tam or otherwise, before any circuit or district court of the United States for the district within which said fine, penalty, or forfeiture may have been incurred,