United States v. Alexander
110 U.S. 325 (1884)

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U.S. Supreme Court

United States v. Alexander, 110 U.S. 325 (1884)

United States v. Alexander

Argued January 22, 1884

Decided February 4, 1884

110 U.S. 325

Syllabus

The Secretary of the Treasury, under authority derived from the Act of May 27, 1872, 17 Stat. 162, abated taxes on spirit in a bonded warehouse destroyed by fire. The Commissioner of Internal Revenue notified the principal and sureties of the distillery warehouse bond of this decision. Held that this was a virtual cancellation of the bond.

This was an action at law brought on a distillery warehouse bond against William S. Alexander and James H. Reynolds, principals, and Edward S. Allen and Mahlon C. Atkinson, their sureties.

The defendants pleaded that the taxes, to recover which the suit was brought, had been abated by the Secretary of the Treasury pursuant to law by an order of which the following is a copy:

"TREASURY DEPARTMENT"

"WASHINGTON, D.C. Aug. 5, 1875"

"Under authority conferred by Act of Congress approved May 27, 1872, I hereby abate the taxes accruing on 8,252 gallons of spirits, amounting to $5,776.46, which were destroyed by fire on the 6th or 7th day of March, 1875, while in the bonded warehouse

Page 110 U. S. 326

of Messrs. Alexander and Reynolds, distillers in the Fourth Collection District of Tennessee."

"C. F. BURNAM"

"Acting Secretary"

"To the Commissioner of Internal Revenue"

And that the same was delivered to the defendants by the Commissioner of Internal Revenue, and the Secretary of the Treasury did thereby release and free the defendants from their liability in the premises.

To this plea the plaintiffs replied that on October 13, 1875, the Secretary of the Treasury did withdraw the said order of abatement and remission dated August 5, 1875, as pleaded.

Upon this issue the case was tried. It appears from the bill of exceptions that the defendants, to sustain their defense, introduced proof tending to show the abatement of the taxes for which the warehouse bond sued on was given, as set out in their plea; that notice of the abatement was given to the Commissioner of Internal Revenue, who gave notice thereof to one Bryant, the collector of internal revenue, with directions to take credit therefor on his bonded account as such collector, which he did, and that he gave notice of the remission of the taxes to Alexander & Reynolds, the principals on the bond, and that they had accepted the abatement and release, and had sent to their sureties on the bond copies of the order of abatement.

Thereupon the plaintiffs introduced evidence tending to show that on October 13, 1875, the Secretary of the Treasury withdrew the abatement of the taxes by the following order:

"TREASURY DEPARTMENT"

"WASHINGTON, D.C. October 23, 1875"

"SIR: In the matter of Alexander & Reynolds, for abatement of taxes accruing on 8,252 gallons of spirits, amounting to $5,776.46, which were destroyed by fire on the 6th or 7th of March, 1875, while in the bonded warehouse of said firm, in the Fourth Collection District of Tennessee, in view of the papers now on file in the case, the order for abatement of said taxes, dated August 5,

Page 110 U. S. 327

1875, is hereby withdrawn until a further consideration of said claim can be had."

"Very respectfully,"

"B. H. BRISTOW, Secretary"

"Hon. D. D. PRATT"

"Commissioner of Internal Revenue"

There is no proof in the record that this order withdrawing the abatement of the taxes ever came to the knowledge of the obligors upon the bond until it was produced on the trial.

Upon this evidence the court charged the jury as follows:

"If you believe from the evidence that on the 5th day of August, 1875, the Secretary of the Treasury abated said taxes, and notified the Commissioner of Internal Revenue thereof, and he notified the collector, and he notified the defendants, the action of the acting Secretary of the Treasury so taken was final, and any attempted suspension or withdrawal thereof would be invalid, and it would be your duty to find for the defendants."

To this charge the plaintiffs excepted. The jury returned a verdict for defendants, and a writ of error sued out by the plaintiffs has brought the case to this Court for review.

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