A-41633, DECEMBER 22, 1932, 12 COMP. GEN. 474

A-41633: Dec 22, 1932

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THE SAME ARE A PART OF THE AMOUNT RECOVERED AGAINST THE COLLECTOR. ARE FOR PAYMENT ACCORDINGLY. TO THE EFFECT THAT PAYMENT WAS NOT AUTHORIZED OF ITEMS OF COURT COSTS AGGREGATING $96.80 AWARDED BY THE COURT AS A PART OF THE JUDGMENT IN FAVOR OF ARTHUR H. THE JUDGMENT WAS RENDERED FEBRUARY 1. INGLE WAS PLAINTIFF AND CARRIE O. EXECUTRIX OF THE LAST WILL AND TESTAMENT OF BERT P. WAS DEFENDANT. THE COMMISSIONER OF INTERNAL REVENUE DETERMINED THAT THE FOLLOWING AMOUNTS WERE DUE TO ARTHUR H. WHILE HE WAS COLLECTOR OF INTERNAL REVENUE FOR THE TWENTY-EIGHTH DISTRICT OF NEW YORK: PRINCIPAL $5. WAS CERTIFIED BY THIS OFFICE ON PREAUDIT AND SUBSEQUENTLY PAID TO THE JUDGMENT CREDITOR ON APRIL 15. HAVE JUDGMENT AGAINST THE DEFENDANT.

A-41633, DECEMBER 22, 1932, 12 COMP. GEN. 474

TAXES, INTERNAL REVENUE - REFUNDS - JUDGMENTS - COURT COSTS WHERE A FINAL JUDGMENT HAS BEEN RENDERED AGAINST A COLLECTOR OF INTERNAL REVENUE, OR HIS ESTATE, FOR REFUND OF TAXES ERRONEOUSLY COLLECTED THE COURT'S CERTIFICATE OF PROBABLE CAUSE, WHEN GIVEN, CONVERTS SUCH A JUDGMENT INTO AN OBLIGATION OF THE UNITED STATES FOR PAYMENT UNDER THE PROPER APPROPRIATION FROM THE TREASURY; AND WHERE SUCH JUDGMENT INCLUDES CERTAIN STIPULATED INTEREST AND COSTS, THE SAME ARE A PART OF THE AMOUNT RECOVERED AGAINST THE COLLECTOR, OR HIS ESTATE, FOR THE PAYMENT OF WHICH THE UNITED STATES BECAME LIABLE WHEN THE COURT GRANTED A CERTIFICATE OF PROBABLE CAUSE UNDER SECTION 989, REVISED STATUTES, AND ARE FOR PAYMENT ACCORDINGLY.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, DECEMBER 22, 1932:

THERE HAS BEEN RECEIVED, PRESUMABLY BY YOUR DIRECTION, A REQUEST FROM THE COMMISSIONER OF INTERNAL REVENUE, DATED NOVEMBER 14, 1932, FOR RECONSIDERATION OF DECISION OF THIS OFFICE OF AUGUST 31, 1932, TO THE EFFECT THAT PAYMENT WAS NOT AUTHORIZED OF ITEMS OF COURT COSTS AGGREGATING $96.80 AWARDED BY THE COURT AS A PART OF THE JUDGMENT IN FAVOR OF ARTHUR H. INGLE IN HIS SUIT AGAINST THE ESTATE OF A FORMER COLLECTOR OF INTERNAL REVENUE ON ACCOUNT OF INCOME TAXES ERRONEOUSLY COLLECTED. THE JUDGMENT WAS RENDERED FEBRUARY 1, 1932, IN THE UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF NEW YORK, IN THE LAW CASE NO. 218-A, WHEREIN ARTHUR H. INGLE WAS PLAINTIFF AND CARRIE O. GAGE, EXECUTRIX OF THE LAST WILL AND TESTAMENT OF BERT P. GAGE, DECEASED, WAS DEFENDANT. THE AMOUNT IN QUESTION, $96.80, REPRESENTS CERTAIN ITEMS OF THE $157 COSTS AWARDED TO THE PLAINTIFF UNDER ITS SAID JUDGMENT AGAINST THE DEFENDANT.

THE RECORD DISCLOSES THAT BY CERTIFICATE OF OVERASSESSMENT AND SCHEDULE NO. IT-46154, DATED MARCH 26, 1932. THE COMMISSIONER OF INTERNAL REVENUE DETERMINED THAT THE FOLLOWING AMOUNTS WERE DUE TO ARTHUR H. INGLE UNDER SAID JUDGMENT, FOR REFUND OF INCOME TAXES FOR THE YEAR 1918 WHICH HAD BEEN ERRONEOUSLY OR ILLEGALLY COLLECTED BY BERT P. GAGE, WHILE HE WAS COLLECTOR OF INTERNAL REVENUE FOR THE TWENTY-EIGHTH DISTRICT OF NEW YORK: PRINCIPAL $5,504.21; INTEREST $2,137.21; AND COSTS $60.20; OR A TOTAL OF $7,701.62. THE JUDGMENT WITH INTEREST AND COSTS, AS ALLOWED BY THE COMMISSIONER IN SAID CERTIFICATE AND SCHEDULE NO. IT-46154, WAS CERTIFIED BY THIS OFFICE ON PREAUDIT AND SUBSEQUENTLY PAID TO THE JUDGMENT CREDITOR ON APRIL 15, 1932, BY J. L. SUMMERS, DISBURSING CLERK, TREASURY DEPARTMENT. IN HIS SAID CERTIFICATE OF OVERASSESSMENT AND SCHEDULE, THE COMMISSIONER WITHHELD $96.80 OF THE TOTAL OF $157 COSTS STIPULATED IN THE JUDGMENT AS QUESTIONABLE ITEMS OF COSTS NOT PROPERLY PAYABLE BY THE UNITED STATES.

THE INVOLVED JUDGMENT PROVIDED:

ORDERED AND ADJUDGED THAT THE PLAINTIFF, ARTHUR H. INGLE, HAVE JUDGMENT AGAINST THE DEFENDANT, CARRIE O. GAGE, EXECUTRIX OF THE LAST WILL AND TESTAMENT OF BERT P. GAGE, DECEASED, FOR THE AMOUNT OF TAX, $5,290.74, AND INTEREST, $213.47, ATTRIBUTABLE TO THE LOSSES ON THE WEAVER AND SCHRADER PROPERTIES IN THE SUM OF FIVE THOUSAND FIVE HUNDRED FOUR AND 21/100 ($5,504.21) DOLLARS WITH INTEREST THEREON AT SIX PERCENT FROM THE DATE OF COLLECTION, OCTOBER 5TH, 1925, TO A DATE TO BE DETERMINED BY THE COMMISSIONER OF INTERNAL REVENUE, AND IN ADDITION THERETO FOR COSTS IN THE SUM OF $157.00 THE AMOUNT THEREOF TO BE TAXED BY THE CLERK AND INSERTED IN HIS JUDGMENT, WITH INTEREST ON THE AMOUNT OF COSTS FROM THE DATE OF THIS JUDGMENT TO THE SAME DATE AS ABOVE STATED.

PURSUANT TO SECTION 989 OF THE REVISED STATUTES OF THE UNITED STATES THE COURT HEREBY CERTIFIES THAT THERE WAS PROBABLE AND REASONABLE CAUSE FOR THE ACT OF BERT P. GAGE, THE COLLECTOR OF INTERNAL REVENUE,DEFENDANT'S TESTATOR IN DEMANDING AND COLLECTING FROM THE PLAINTIFF THE INTERNAL- REVENUE TAX, FOR THE REFUND OF WHICH THIS JUDGMENT IS ENTERED AND A CERTIFICATE OF PROBABLE CAUSE IS HEREBY GRANTED ACCORDINGLY TO THE DEFENDANT.

DATED THIS 1 DAY OF FEBRUARY, 1932.

SECTION 989, REVISED STATUTES, PROVIDES:

WHEN A RECOVERY IS HAD IN ANY SUIT OR PROCEEDING AGAINST A COLLECTOR OR OTHER OFFICER OF THE REVENUE FOR ANY ACT DONE BY HIM, OR FOR THE RECOVERY OF ANY MONEY EXACTED BY OR PAID TO HIM AND BY HIM PAID INTO THE TREASURY, IN THE PERFORMANCE OF HIS OFFICIAL DUTY, AND THE COURT CERTIFIES THAT THERE WAS PROBABLE CAUSE FOR THE ACT DONE BY THE COLLECTOR OR OTHER OFFICER, OR THAT HE ACTED UNDER THE DIRECTIONS OF THE SECRETARY OF THE TREASURY, OR OTHER PROPER OFFICER OF THE GOVERNMENT, NO EXECUTION SHALL ISSUE AGAINST SUCH COLLECTOR OR OTHER OFFICER, BUT THE AMOUNT SO RECOVERED SHALL, UPON FINAL JUDGMENT, BE PROVIDED FOR AND PAID OUT OF THE PROPER APPROPRIATION FROM THE TREASURY.

IT IS A GENERAL RULE OF LAW THAT A JUDGMENT FOR DEBT OR FOR DAMAGES AND COSTS IS AN ENTIRETY, AND THAT THE COSTS FOLLOW AS AN INCIDENT TO THE JUDGMENT FOR THE DEBT OR DAMAGES AND ARE COLLECTIBLE BY EXECUTION IN THE SAME MANNER AS THE AMOUNT AWARDED FOR THE DEBT OR DAMAGES. THE METHOD OF OBTAINING RELIEF AGAINST ERRONEOUS TAXATION OF COSTS IS USUALLY BY MOTION TO RETAX IN THE COURT WHERE THE JUDGMENT WAS RENDERED. IT HAS BEEN HELD THAT THE ERRONEOUS TAXATION OF COSTS IS NOT AGROUND TO QUASH AN EXECUTION, TO SET ASIDE A JUDGMENT IN WHICH THE COSTS ARE INSERTED, OR TO REVERSE THE JUDGMENT. A JUDGMENT RENDERED BY A COURT HAVING JURISDICTION OF THE PARTIES AND THE SUBJECT MATTER, UNLESS REVERSED OR ANNULLED IN SOME PROPER PROCEEDING, IS NOT OPEN TO CONTRADICTION OR IMPEACHMENT, IN RESPECT TO ITS VALIDITY, OR BINDING EFFECT, BY PARTIES OR PRIVIES, IN ANY COLLATERAL ACTION OR PROCEEDING, EXCEPT FOR FRAUD IN ITS PROCUREMENT. IN THIS CONNECTION, SEE 15 CORPUS JURIS, 185, 310; AND 35 CORPUS JURIS, 501, 511, 513; AND COURT CASES THERE CITED.

TAXABLE COSTS IN AN ACTION AT LAW ARE MADE EITHER BY STATUTE, RULE OF COURT, OR ORDER OF COURT IN A SPECIFIC CASE, OR BY ESTABLISHED USAGE EQUIVALENT OF A RULE. PARKERSON V. BORST, 256 FED.REP. 827. THE COURTS EXERCISE A DISCRETION IN THE TAXATION OF COSTS AND DISBURSEMENT, IN DETERMINING WHAT ARE NECESSARY AND REASONABLE ITEMS. UNITED STATES V. MINNEAPOLIS, ST PAUL AND S.S.M.RY.CO., 235 FED.REP. 951.

THE DECISION OF AUGUST 31, 1932, IN THIS CASE WAS ON THE BASIS THAT THE JUDGMENT WAS AGAINST THE UNITED STATES AND THERE WAS APPLIED THE STATUTE SPECIFICALLY LIMITING THE ITEMS OF COST IN SUCH CASES.

IT APPEARS, HOWEVER, THAT IN CASES SUCH AS THE ONE HERE UNDER CONSIDERATION, WHERE A FINAL JUDGMENT HAS BEEN RENDERED AGAINST A COLLECTOR OF INTERNAL REVENUE, OR HIS ESTATE, FOR REFUND OF TAXES ERRONEOUSLY COLLECTED, SECTION 989, REVISED STATUTES, PROVIDES THAT NO EXECUTION SHALL ISSUE AGAINST THE JUDGMENT CREDITOR, BUT THAT THE AMOUNT RECOVERED BY THE JUDGMENT SHALL BE PROVIDED FOR AND PAID OUT OF THE PROPER APPROPRIATION FROM THE TREASURY. THE JUDGMENT AGAINST THE COLLECTOR, OR HIS ESTATE, IN SUCH CASES IS NOT ONE AGAINST THE UNITED STATES BUT THE COURT'S CERTIFICATE OF PROBABLE CAUSE, WHEN GIVEN, CONVERTS SUCH A JUDGMENT INTO AN OBLIGATION OF THE UNITED STATES. KLOCK PRODUCE COMPANY V. HARTSON, 212 FED.REP. 758; UNITED STATES V. SHERMAN, 98 U.S. 567; AND ALSO SEE 8 COMP. GEN. 126, 128.

SECTION 3220, REVISED STATUTES, AS AMENDED BY THE ACT OF FEBRUARY 24, 1919, 40 STAT. 1145, AUTHORIZES REPAYMENT TO A COLLECTOR OF---

* * * THE FULL AMOUNT OF SUCH SUMS OF MONEY AS MAY BE RECOVERED AGAINST HIM IN ANY COURT FOR ANY INTERNAL-REVENUE TAXES COLLECTED BY HIM, WITH THE COSTS AND EXPENSES OF SUIT; * * *

IN THE INSTANT MATTER, THE INTEREST AND COSTS WHICH WERE INCLUDED IN THE CLAIMANT'S JUDGMENT ARE A PART OF THE AMOUNT RECOVERED BY HIM AGAINST THE DEFENDANT FOR THE PAYMENT OF WHICH THE UNITED STATES BECAME LIABLE WHEN THE COURT GRANTED A CERTIFICATE OF PROBABLE CAUSE UNDER SECTION 989, REVISED STATUTES, SUPRA. IF ANY ITEMS OF SUCH COSTS WERE NOT PROPERLY FOR COLLECTION FROM THE UNITED STATES, THE ATTENTION OF THE COURT SHOULD HAVE BEEN DIRECTED THERETO BY THE UNITED STATES ATTORNEY, AT THE TIME SAID JUDGMENT FOR THE $157 COSTS WAS RENDERED.

UNDER THE CIRCUMSTANCES AS ABOVE SHOWN THE UNITED STATES IS LIABLE FOR THE FULL AMOUNT OF THE CLAIMANT'S JUDGMENT, INCLUDING INTEREST AND COSTS AS THEREIN STIPULATED.

YOU ARE ADVISED, THEREFORE, THAT THE ITEMS OF COURT COSTS INCLUDED IN SAID JUDGMENT, AMOUNTING TO $96.80, WHICH HERETOFORE WERE WITHHELD AS QUESTIONABLE, MAY NOW PROPERLY BE MADE THE BASIS OF A SUPPLEMENTAL CERTIFICATE OF OVERASSESSMENT AND SCHEDULE FOR PAYMENT.