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United States v. Jefferson Electric Mfg. Co., 291 U.S. 386 (1934)

United States v. Jefferson Electric Manufacturing Co.

No. 171

Argued December 15, 18, 1933

Decided February 12, 1934*

291 U.S. 386


1. As a general rule, where the legislation dealing with a particular subject consists of a system of related general provisions indicative of a settled policy, new enactments of a fragmentary nature on that subject are to be taken as intended to fit into the existing system and to be carried into effect conformably to it, excepting as a different purpose is plainly shown. P. 291 U. S. 396.

2. A manufacturer from whom money had been collected as taxes on account of sales of his products, upon the erroneous assumption that the articles sold were automobile parts or accessories and the sales therefore taxable under Revenue Acts, 1924, § 600(3) and 1918 and 1921, §§ 900(3), was entitled to a refund of the amount collected; but, by Revenue Act, 1928, § 424, the right is qualified, if suit was not begun before April 3, 1928, by the condition that the burden of the illegal tax must be shown to rest upon the manufacturer alone, and not upon the purchaser. Pp. 291 U. S. 392-395.

3. Section 424, subdivision (a)(2) of the Act of 1928, in providing as to such cases that "no refund shall be made" unless it be established "to the satisfaction of the Commissioner" that the amount was not collected, directly or indirectly, from the purchaser, or, if so collected, has been returned to the purchaser, did not depart from the general system whereby a claim for a refund, having been duly but unsuccessfully urged before the Commissioner, may be fully and finally adjudicated in court; its effect was to add a new element in the right to refund -- the non-shifting of the tax burden -- which must be set up and proved as an element of the claim or cause of action, whether the proceeding be before the Commissioner or, subsequently, in court. P. 291 U. S. 397.

4. The provision that this additional element is to be "established to the satisfaction of the Commissioner" does not mean that his

Page 291 U. S. 387

decision shall be final, but is rather an admonition that the additional element is not lightly to be inferred, but is to be established by proof that convinces in the sense of inducing belief. Williamsport Wire Rope Co. v. United States, 277 U. S. 551, distinguished. P. 291 U. S. 397.

5. To warrant a judgment for the taxpayer in a suit for a refund of taxes of the designated class, the element added by subdivision (a)(2), supra -- i.e., that the tax burden is on the manufacturer, and not on the purchaser -- must be pleaded and proved and determined in his favor like other elements of the cause of action. P. 291 U. S. 400.

6. In such a suit, the court, whether the District Court or the Court of Claims, cannot render judgment for a refund subject to the condition that the claimant prove to the Commissioner that he alone has borne the burden of the tax. P. 291 U. S. 400.

7. A conditional judgment would not be within the jurisdiction of the District Court, as limited by the Constitution. P. 291 U. S. 400.

8. The statutes defining the jurisdiction of the District Courts and Court of Claims in suits of this class contemplate that their judgments shall fully and finally determine whether the claimants are entitled to the refunds for which they sue. P. 291 U. S. 401.

9. The operation of subdivision (a)(2) of § 424 of the Revenue Act of 1928 is the same when the suit for refund is against the United States and when it is against the Collector. P. 291 U. S. 403.

10. An Act of Congress providing that manufacturers who have been forced to pay erroneous and illegal taxes on sales shall have no refund unless they show that the burden of the taxes has not been shifted to the purchasers or unless they give bond to use the refunded money in reimbursing purchasers does not infringe their rights under the due process clause of the Fifth Amendment when applied to taxes which, under the prior law, were recoverable by the manufacturers without such conditions in suits already pending when the Act was passed. If the tax burden has been shifted to the purchasers, they, and not the manufacturers, are the real parties in interest. P. 291 U. S. 401.

11. Statutes providing for refunds of taxes and for suits therefor, proceed on the same equitable principles that underlie an action in assumpsit for money had and received. P. 291 U. S. 402.

12. If a manufacturing company, by its invoice, represented to its purchaser that the amount shown thereon included the sales tax as well as the selling price, and if it returned that amount less the tax as the selling price, and caused the tax to be computed on that basis, it cannot be heard to say, in the absence of other

Page 291 U. S. 388

controlling circumstances, that it did not collect the tax from the purchaser, but itself bore the burden thereof. P. 291 U. S. 405.

13. Uncertainty and apparent conflict in findings of the Court of Claims may necessitate a reversal of the judgment and remand of the cause for a new trial and full and specific findings. P. 291 U. S. 406.

14. In a law case tried to the District Court without a jury, a motion by the defense for judgment on all the evidence is rightly overruled if there is substantial evidence fairly tending to establish every element of the plaintiff's cause of action. P. 291 U. S. 407.

15. Upon appeal from the District Court, sitting in a law case without a jury, it is beyond the province of the appellate court to reexamine the evidence and reverse the judgment because of what it regards as error of fact. Id.

16. A finding that the plaintiff had sustained the burden of proof as to a designated issue, held inadequate as a finding of the facts involved in the issue and insufficient to support the judgment. P. 291 U. S. 408.

17. Where a manufacturer's collections from purchasers were at the former prices but the invoices indicated that part of the amounts charged represented the tax on the sales and the remainder the "real sales price," and the tax was computed and paid by the manufacturer on the latter basis, thereby saving to itself the difference between the tax on the full amount and the tax on the "real sales price," it is a sound finding that the tax was collected from the purchasers; but to say that as the price theretofore in vogue was reduced by the amount of the tax, the manufacturer, in effect, returned the tax to the purchasers, is not a finding but an illogical argument. P. 291 U. S. 409.

18. Where judgments of the District Court had been reversed by the Circuit Court of Appeals on untenable grounds, but were erroneous because of insufficiencies of the special findings, held that the judgments of both courts should be reversed and the suits remanded to the District Court with directions to vacate its findings and grant new trials. P. 291 U. S. 410.

69 Ct.Cls. 150, 38 F.2d 139; 2 F.Supp. 778, reversed.

58 F.2d 246, 248, and 63 F.2d 783, reversed.

65 F.2d 89 reversed.

Certiorari, 290 U.S. 607, 612, to review a judgment of the Court of Claims sustaining a claim of the Jefferson Electric Manufacturing Company and dismissing a counterclaim; a judgment of the Circuit Court of Appeals for

Page 291 U. S. 389

the Second Circuit reversing three judgments recovered by the Chain Company in the District Court for Connecticut, and a judgment of the Circuit Court of Appeals for the Sixth Circuit affirming five judgments recovered by the Storage Battery Company in the District Court for the Northern District of Ohio, Eastern Division. All of the claims were for refunds of taxes collected on sales.

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