Reporter's Statement of the Case 92 C. Cls. The court made special findings of fact as follows, upon the basis of an agreed statement of facts between the parties, which was all the evidence introduced: 1. Plaintiff is a dissolved corporation, having been organized under and by virtue of the laws of the State of Delaware. During its existence it maintained its principal office, place of business, and postal address at No. 260 South Broad Street, Philadelphia, Pennsylvania. 2. On September 30, 1936, the plaintiff began complete liquidation and dissolution pursuant to the laws of the said State of Delaware. Article I, section 42 of the General Corporation Law of the State of Delaware provided, at the time plaintiff filed its petition with this Court, and now provides, as follows: Continuation of Corporation After Dissolution for Purposes of Suit, Etc.:-All corporations, whether they expire by their own limitations, or are otherwise dissolved, shall nevertheless be continued for the term of three years from such expiration or dissolution bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their business, to dispose of and convey their property, and to divide their capital stock but not for the purpose of continuing the business for which said corporation shall have been established; provided, however, that with respect to any action, suit, or proceeding begun or commenced by or against the corporation prior to such expiration or dissolution and with respect to any action, suit or proceeding begun or commenced by the corporation within three years after the date of such expiration or dissolution, such corporation shall only for the purpose of such actions, suits or proceedings so begun or commenced be continued bodies corporate beyond said three-year period and until any judgments, orders, or decrees therein shall be fully executed. 3. Because of its contemplated liquidation and dissolution, plaintiff, on July 29, 1936, requested of the Collector of Internal Revenue at Philadelphia, Pennsylvania, and received from the said Collector on August 4, 1936, an extension of time for filing its capital stock tax return for the taxable year ending June 30, 1936. The extension granted permitted plaintiff to file its return at any time up to Sep 441 Reporter's Statement of the Case tember 29, 1936, it being stipulated in the extension granted that plaintiff should pay interest from July 31, 1936, to the date of payment of the tax. Plaintiff during the said capital stock tax year ending June 30, 1936, was actively engaged in doing business for which it was originally organized, and consequently it knew at the end of such year that it was liable for Federal capital stock tax for such period. 4. On July 30, 1936, plaintiff made to the Collector of Internal Revenue for the First District of Pennsylvania at Philadelphia, and such Collector received and retained, a payment of $30,000 pending the filing of its capital stock tax return for such year. Such payment was made to avoid the accrual of interest during the period of extension. The Collector's receipt given to plaintiff for this payment bore the following legend in the upper right-hand corner: "1936 Capital Stock Tax-Tentative Payment." 5. The $30,000 paid by plaintiff to the Collector was credited by that officer to "Suspense Account 9" on his books and by him, in due course, covered into the Treasury of the United States in the same manner as though the Collector were able to credit it immediately to an assessment. 6. On September 28, 1936, plaintiff duly filed with the Collector of Internal Revenue for the First District of Pennsylvania, at Philadelphia, its capital stock tax return for the year ending June 30, 1936, showing a capital stock tax liability for such year in the amount of $15,000. This was the only capital stock tax return filed by plaintiff for the capital stock tax year ending June 30, 1936. The Collector thereupon entered an assessment of $15,000 against plaintiff. 7. In its letter of September 28, 1936, which transmitted its capital stock tax return, plaintiff requested the Collector to refund the excess of $15,000 previously paid to him, the last paragraph of such letter being as follows: On July 30, 1936, a tentative payment of $30,000 was made pending the filing of the above return. The return as now filed shows a tax liability of only $15,000 or $15,000 less than the tentative payment. It is respectfully requested that the excess of $15,000 be refunded. Reporter's Statement of the Case 92 C. Cls. Plaintiff was orally advised at the time it filed its return that such excess amount would be refunded to it without plaintiff filing a claim for refund. 8. The requested refund, for reasons unknown to plaintiff, was not made, and in April 1937 plaintiff again orally inquired at the office of the Collector regarding the return of said excess amount paid, and was then advised that a claim for refund of it would have to be filed. On April 27, 1937 plaintiff accordingly filed with the said Collector its claim on Form 843 for refund of the $15,000 excess. The claim stated the circumstances under which the payment of $30,000 had been made. 9. On June 28, 1937, plaintiff received from the Treasury Department a communication on Treasury Form No. 7801 entitled, "Notice of Adjustment of Claim for Refund" dated May 28, 1937, bearing the symbols MT: CST: MHJ stating: Your claim for refund of capital stock tax paid for the year ended June 30, 1936, erroneously or illegally collected, has been adjusted as shown below. Claimed: $15,000. Allowed: $15,000. According to the original declared value of your capital stock as shown on your 1936 return, the amount of tax due is $15,000. Since you have paid $30,000, the overpayment of $15,000 is refunded herewith. A check by the Disbursing Clerk of the Department for the amount refunded is forwarded herewith. This communication was signed on behalf of the Internal Revenue Bureau by D. S. Bliss, Deputy Commissioner. Accompanying said communication was a check on the Treasurer of the United States in the amount of $15,000 dated June 23, 1937, payable to plaintiff. The lower left-hand corner thereof bore the printed legend, "Refunding taxes illegally collected." Nothing was then, nor has anything since been, remitted to plaintiff by the Treasury Department as or in the nature of interest on the amount refunded to plaintiff. 10. On July 30, 1937, plaintiff filed its refund claim on Treasury Form 843 with the Collector of Internal Revenue for the First District of Pennsylvania, at Philadelphia, for interest in the amount of $820, on the ground that the Com 441 Opinion of the Court missioner of Internal Revenue improperly and illegally failed to include interest on the $15,000 returned to plaintiff. The amount of $820 represented interest on said excess payment of $15,000 at the rate of 6 percent per annum from the date it was made to the Collector, July 30, 1936, to the date of refund of the said amount to the plaintiff, June 23, 1937. 11. By June 30, 1938, the Commissioner of Internal Revenue had failed either to allow or disallow this said claim for interest filed July 30, 1937, and on that date plaintiff filed this suit on the said claim. 12. Under date of September 19, 1938, the Commissioner of Internal Revenue notified plaintiff of the rejection of its claim for refund of $820 interest. The rejection was based on the fact that suit for the recovery of this interest had been instituted in the United States Court of Claims. Plaintiff waives claim for interest on the $820 interest sought to be recovered herein, regardless of anything contained in the last paragraph of its petition. The court decided that the plaintiff was entitled to recover. WHITAKER, Judge, delivered the opinion of the court: The plaintiff sues to recover interest on an alleged overpayment in respect of its capital stock liability for 1936. If there was an overpayment "in respect of" this capital stock tax, plaintiff is entitled to recover under section 614 (a) of the Revenue Act of 1928 (45 Stat. 791, 876), which provides: Interest shall be allowed and paid upon any overpayment in respect of any internal-revenue tax, at the rate of 6 per centum per annum, On July 29, 1936, the plaintiff was contemplating dissolution. On the next day its capital stock tax was due. In view of the situation, it requested an extension of time for filing its return, and on the next day, in order to save interest, forwarded to the Collector $30,000 on account of this tax liability. This was accepted by the Collector and receipt was issued for the amount as "1936 Capital Stock TaxTentative Payment." On September 28, 1936, the plaintiff filed its capital stock tax return showing a tax of $15,000, which was thereupon assessed. Opinion of the Court 92 C. Cls. At the time this return was filed plaintiff by letter requested the refund of the excess payment. This not being forthcoming, plaintiff on April 27, 1937 filed a claim for refund, which was allowed and paid on June 28, 1937. No interest having been included in the amount refunded, plaintiff on July 30, 1937 filed another claim for refund of this interest, amounting to $820.00. More than six months having elapsed without action on this claim, this suit was brought on June 30, 1938. The defendant says the amount paid on June 30, 1936, was not an overpayment, but merely a deposit. It says that a payment is the delivery by a debtor to his creditor of the amount due in satisfaction of his debt, and that this $30,000 was not delivered in satisfaction of a debt and, therefore, was not a payment. Manifestly this is not the sense in which the word "payment" was used. The act speaks of an overpayment, of a payment that more than satisfies the debt. The only requirement is that the payment be made “in respect of any internal-revenue tax." Plainly, this payment was made "in respect of" the plaintiff's capital stock tax liability. It was a payment of what the plaintiff estimated its tax liability to be. It was the payment of a liability then due, but the amount of which had not been ascertained. As it turned out, it was too great a payment; in other words, an "overpayment." Cf. Standard Oil Co. (Indiana) v. United States, 78 C. Cls. 714, Certiorari denied 293 U. S. 599; Eastman Kodak Co. v. United States, 82 C. Cls. 504, Certiorari denied, 299 U. S. 581. The decision of the District Court for the Southern District of New York in Moses, Executor v. United States, 28 F. Supp. 817, is to the contrary, but we are so clearly of opinion that the payment in question was one in contemplation of the statute providing for interest on overpayments that we must decline to follow this case. It results that the plaintiff is entitled to recover of the defendant the sum of $820.00, for which judgment will be entered. It is so ordered. LITTLETON, Judge; GREEN, Judge; and WHALEY, Chief Justice, concur. |