A-35587, AUGUST 18, 1931, 11 COMP. GEN. 77

A-35587: Aug 18, 1931

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NO CLAIM FOR ADDITIONAL INTEREST IS ALLOWABLE UNDER THE PROVISIONS OF SECTION 177 OF THE JUDICIAL CODE. 1931: THERE IS FOR CONSIDERATION THE CLAIM OF THE IRON MOUNTAIN OIL CO. THE FACTS IN THE CASE ARE THAT ON MARCH 5. A JUDGMENT WAS RENDERED BY THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA IN FAVOR OF THE IRON MOUNTAIN OIL CO. AGAINST WHOM THE SUIT WAS INSTITUTED. SHOULD HAVE AND RECOVER AGAINST THE APPELLANT HIS COSTS THEREIN. THE SAME WAS DENIED AND THE COURT. THAT AMOUNT WAS PAID TO THE CLAIMANT. WAS REDUCED TO THE FOREGOING AMOUNT BY REASON OF A TRANSPOSITION OF FIGURES IN THE JUDGMENT RESULTING IN AN ERROR IN COMPUTING THE AMOUNT OF INTEREST TO DATE OF THE JUDGMENT.

A-35587, AUGUST 18, 1931, 11 COMP. GEN. 77

INTEREST - JUDGMENTS - INTERNAL-REVENUE TAX REFUNDS IN A JUDGMENT RENDERED BY A UNITED STATES DISTRICT COURT PROVIDING THAT THE PETITIONER SHALL RECOVER A SPECIFIED AMOUNT AS REFUND OF INCOME TAX WITH INTEREST TO DATE OF SAID JUDGMENT AND "THAT THE PLAINTIFF DO NOT RECOVER ANY FURTHER OR ADDITIONAL SUM OF AND FROM THE DEFENDANT ON ITS PETITION IN THIS CASE," THE SAME BEING AFFIRMED BY THE CIRCUIT COURT OF APPEALS ON APPEAL BY THE PLAINTIFF, NO CLAIM FOR ADDITIONAL INTEREST IS ALLOWABLE UNDER THE PROVISIONS OF SECTION 177 OF THE JUDICIAL CODE, AS AMENDED BY SECTION 615 OF THE REVENUE ACT OF MAY 29, 1928, 45 STAT. 877.

DECISION BY COMPTROLLER GENERAL MCCARL, AUGUST 18, 1931:

THERE IS FOR CONSIDERATION THE CLAIM OF THE IRON MOUNTAIN OIL CO. FOR THE PAYMENT OF INTEREST ON A JUDGMENT IN FAVOR OF THE CLAIMANT FROM THE DATE OF THE JUDGMENT TO WITHIN 30 DAYS OF THE DATE OF THE CHECK ISSUED IN PAYMENT THEREOF. THE FACTS IN THE CASE ARE THAT ON MARCH 5, 1928, A JUDGMENT WAS RENDERED BY THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA IN FAVOR OF THE IRON MOUNTAIN OIL CO. FOR $3,010.55, INCLUDING INTEREST FROM MARCH 29, 1924, TO THE DATE OF JUDGMENT, REPRESENTING A REFUND OF INCOME TAXES FOR THE YEAR 1917. THE PLAINTIFF APPEALED THE CASE TO THE CIRCUIT COURT OF APPEALS FOR THE TENTH CIRCUIT, WHICH COURT BY DECISION DATED JANUARY 14, 1930, AFFIRMED THE JUDGMENT OF THE COURT BELOW, BUT DENIED THE APPELLANT'S CLAIM FOR SOME ADDITIONAL $60,000, AND HELD THAT ACEL C. ALEXANDER, COLLECTOR OF INTERNAL REVENUE FOR THE DISTRICT OF OKLAHOMA, AGAINST WHOM THE SUIT WAS INSTITUTED, SHOULD HAVE AND RECOVER AGAINST THE APPELLANT HIS COSTS THEREIN. THE APPELLANT PETITIONED THE CIRCUIT COURT OF APPEALS FOR A REHEARING, BUT IN A DECISION DATED FEBRUARY 17, 1930, THE SAME WAS DENIED AND THE COURT, BY ITS FURTHER ORDER, HELD THAT THE SAID PETITION HAVING BEEN FOUND TO BE WHOLLY WITHOUT MERIT, VEXATIOUS, AND FOR DELAY THAT THE SUM OF $100, TOGETHER WITH COSTS,SHOULD BE RECOVERED FROM THE APPELLANT AND IN FAVOR OF THE APPELLEE. AFTER THE ISSUANCE OF A CERTIFICATE OF PROBABLE CAUSE THE CLAIMANT PRESENTED A CLAIM TO THE COMMISSIONER OF INTERNAL REVENUE FOR PAYMENT OF THE AMOUNT INVOLVED AND THAT OFFICER BY INTERNAL REVENUE SCHEDULE NO. 41430 AUTHORIZED PAYMENT OF THE SUM OF $3,001.60, AND THAT AMOUNT WAS PAID TO THE CLAIMANT. THE AMOUNT OF $3,010.55, AS SPECIFIED IN THE JUDGMENT, WAS REDUCED TO THE FOREGOING AMOUNT BY REASON OF A TRANSPOSITION OF FIGURES IN THE JUDGMENT RESULTING IN AN ERROR IN COMPUTING THE AMOUNT OF INTEREST TO DATE OF THE JUDGMENT.

THE CLAIM AS NOW PRESENTED APPEARS TO BE BASED UPON SECTION 177 OF THE JUDICIAL CODE, AS AMENDED BY SECTION 615 OF THE REVENUE ACT OF MAY 29, 1928, 45 STAT. 877, PROVIDING AS FOLLOWS:

IN ANY JUDGMENT OF ANY COURT RENDERED (WHETHER AGAINST THE UNITED STATES, A COLLECTOR OR DEPUTY COLLECTOR OF INTERNAL REVENUE, A FORMER COLLECTOR OR DEPUTY COLLECTOR, OR THE PERSONAL REPRESENTATIVE IN CASE OF DEATH) FOR ANY OVERPAYMENT IN RESPECT OF ANY INTERNAL-REVENUE TAX, INTEREST SHALL BE ALLOWED AT THE RATE OF 6 PERCENTUM PER ANNUM UPON THE AMOUNT OF THE OVERPAYMENT, FROM THE DATE OF THE PAYMENT OR COLLECTION THEREOF TO A DATE PRECEDING THE DATE OF THE REFUND CHECK BY NOT MORE THAN THIRTY DAYS, SUCH DATE TO BE DETERMINED BY THE COMMISSIONER OF INTERNAL REVENUE.

THE JUDGMENT WAS AFFIRMED ON JANUARY 14, 1930, AND THE MANDATE FILED AND SPREAD OF RECORD IN THE DISTRICT COURT ON JULY 30, 1930, AND IN CONNECTION THEREWITH THE CLAIMANT CONTENDS THAT BECAUSE THE AMENDMENT OF MAY 29, 1928, WAS IN EFFECT AT THE DATE OF THE FINAL JUDGMENT THAT THE TAXPAYER IS ENTITLED TO INTEREST "BEYOND JULY 1, 1930," AND, FURTHER, THAT THE AMENDMENT WAS IN EFFECT WHETHER THE DATE OF AFFIRMANCE, JANUARY 4/14), 1930, OF THE DATE OF FILING THE MANDATE, JULY 30, 1930, BE CONSIDERED AS THE DATE OF THE FINAL JUDGMENT UNDER THE AFFIRMANCE OF THE CIRCUIT COURT OF APPEALS.

THE ORIGINAL JUDGMENT RENDERED MARCH 5, 1928, SPECIFICALLY PROVIDES:

* * * THAT PLAINTIFF HAVE AND RECOVER OF AND FROM THE DEFENDANT THE SUM OF $3,010.55, AND THAT PLAINTIFF DO NOT RECOVER ANY FURTHER OF ADDITIONAL SUM OF AND FROM THE DEFENDANT ON ITS PETITION IN THIS CASE * * *

AT THE TIME THAT JUDGMENT WAS RENDERED THERE WAS NO AUTHORITY OF LAW FOR ALLOWING INTEREST SUBSEQUENT TO THE DATE OF THE JUDGMENT.

THE JUDGMENT AS RENDERED WAS AFFIRMED BY THE CIRCUIT COURT OF APPEALS AND NO REFERENCE WAS MADE TO THE AMENDMENT OF MAY 29, 1928, ALTHOUGH THE SAME WAS IN EFFECT AT THE DATE OF THE AFFIRMANCE OF THE JUDGMENT. THE RECORD DISCLOSES ALSO THAT IN THE CERTIFICATE OF PROBABLE CAUSE ISSUED BY THE DISTRICT COURT ON AUGUST 12, 1930, SUBSEQUENT TO THE ABOVE ACTION BY THE CIRCUIT COURT OF APPEALS, THE AMOUNT SHOWN IN THE ORIGINAL JUDGMENT WAS RESTATED AND THE WORDS "TOGETHER WITH INTEREST" TYPED THEREIN WERE STRICKEN OUT, APPARENTLY BY THE COURT PRIOR TO AFFIXING THE SIGNATURE. ALL OF THE FOREGOING SHOWS THE CLEAREST INTENTIONS BOTH ON THE PART OF THE DISTRICT COURT AND OF THE CIRCUIT COURT OF APPEALS TO DENY INTEREST BEYOND THE DATE OF THE ORIGINAL JUDGMENT.

IF THE CLAIMANT HAD NOT APPEALED FROM THE ORIGINAL JUDGMENT IN THIS CASE, IT IS CLEAR THERE WOULD BE NO BASIS FOR THE CLAIM FOR ADDITIONAL INTEREST, AND SINCE THE CIRCUIT COURT OF APPEALS AFFIRMED THE ORIGINAL JUDGMENT, WHICH DID NOT CARRY INTEREST FOR ANY PERIOD BEYOND ITS DATE, AND SINCE ON THE PETITION FOR REHEARING THE COURT ASSESSED A PENALTY ON THE GROUND THAT THE PETITION WAS WITHOUT MERIT, VEXATIOUS, AND FOR DELAY IT MUST BE HELD NO ADDITIONAL INTEREST IS PAYABLE IN THIS CASE. TO HOLD OTHERWISE WOULD BE TO PERMIT THE CLAIMANT TO PROFIT BY ITS OWN DELAY AND TO DEFEAT THE CLEARLY EXPRESSED INTENTION OF THE CIRCUIT COURT OF APPEALS THAT "PLAINTIFF DO NOT RECOVER ANY FURTHER OR ADDITIONAL SUM" THAN THE AMOUNT STATED IN THE JUDGMENT OF THE LOWER COURT.

FOR THE REASONS HEREIN STATED THE CLAIM FOR ADDITIONAL INTEREST MUST BE AND IS DISALLOWED.