The Act of March 3, 1891, c. 540, providing for the payment to
the City of Louisville of the amount found due under the Act of
June 16, 1890, c. 424, was in the nature of a judgment, final in
its character, and subject to no appeal, and the duties of the
officers of the government thereafter charged with the payment of
the moneys appropriated by that act were not discretionary, and
were limited to the clerical functions of making payment as
directed by the act.
By the Act of February 25, 1893, c. 165, making provision for
the payment of further and other claims of the same character,
Congress did not intend to in any wise open the transactions which
had been closed by the payment of the moneys directed in the act of
1891.
This is an appeal from a judgment of the Court of Claims in
favor of the City of Louisville based upon a petition filed in that
court for the recovery of seventeen thousand and some-odd dollars,
alleged to be due the city from the government on account of taxes
improperly collected.
It appears that between the years 1862 and 1872, the City of
Louisville, Kentucky, owned a large amount of bonds and stock of
the Louisville & Nashville Railroad Company, upon which the
company paid interest and declared cash dividends, retaining,
however, during most of the time an undistributed surplus. Under
the internal revenue law, § 122, Act June 30, 1864, c. 173, 13
Stat/ 223. 284, in force during this period, the company paid taxes
to the United States upon its gross receipts, its undistributed
surplus, the interest payable on its bonds, and its cash dividends.
The taxes paid on interest and dividends were deducted from the
amounts due as interest and dividends, so that the revenues of the
City of Louisville accruing from these sources were diminished to
the extent of such deductions,
Page 169 U. S. 250
but these deductions were not known to the commissioners of the
sinking fund of the city until the time had expired for an
application to the government to be repaid the taxes so
deducted.
In 1872, in the case of
United States v. Railroad
Company, 17 Wall. 322, this Court decided that a
tax under the above-named section 122 of the internal revenue act,
upon the interest on bonds issued by a railroad company, was a tax
upon the creditor, and not upon the corporation paying it, and that
a municipal corporation, being a portion of the sovereign power of
a state, was not subject to taxation by Congress upon its municipal
revenues.
The time for making application for repayment of the taxes thus
illegally obtained having passed, Rev.Stat. §§ 3220, 3228, resort
was had to Congress, which enacted the statute approved June 16,
1890, c. 424, 26 Stat. 157. The statute authorized and required the
Secretary of the Treasury and the Commissioner of Internal
Revenue
"to audit and adjust the claim of the Board of Sinking Fund
Commissioners of the City of Louisville, Kentucky, for internal
revenue taxes on dividends on shares of stock owned by said board
for said City of Louisville in the Louisville and Nashville
Railroad Company, to the extent such taxes were deducted from any
dividends due and payable to said board, and to pass upon said
claim and render judgment thereon, in the same manner and with the
same effect as if said claim had been presented and prosecuted
within the time fixed and limited by law."
Pursuant to the provisions of this act, the City of Louisville
presented to the proper officers of the Treasury Department its
claim to recover taxes to the amount of $65,578.32, of which the
officers allowed $42,514.03, the latter sum being made up, as
stated, of two items, one of $24,801.14, taxes which had been
deducted from cash dividends, and $17,712.89, taxes which had been
deducted from surplus profits which, on the 17th of November, 1867,
had been set apart by resolution of the board of directors of the
railroad company as the basis of a stock dividend, which was
directed to be distributed in February, 1868. The amount of
$42,514.03, having been
Page 169 U. S. 251
audited and allowed, was reported by the Secretary of the
Treasury to Congress for its action, there being no appropriation
from which the money awarded the city could be paid.
Under the Act of March 3, 1891, being an appropriation to supply
deficiencies, 26 Stat. 862 at 867, Congress provided as
follows:
"Payment to City of Louisville, Kentucky: for payment to the
City of Louisville, Kentucky, the amount found due, under the Act
of Congress approved June 16, 1890, and reported to Congress in
House Executive Document No. 260, of the present session,
$42,514.03."
The amount thus appropriated was duly paid to the city, as
directed by Congress.
Subsequently, another application was made to Congress, and that
body passed the Act approved February 25, 1893, 27 Stat. 477, a
copy of which is set forth in the margin.
*
Under this act, the City of Louisville applied to the proper
officers of the government for a further refund of $34,667.80 on
account of taxes claimed to have been illegally exacted. One item
in this last-named claim, amounting to $3,008.40,
Page 169 U. S. 252
the appellants insist was for taxes collected by the government
from the railroad company upon its undistributed surplus in 1868
and 1871, and that this item had been included in the claim
presented in 1890, but had not been allowed because, as stated in
the determination made by the Commissioner of Internal Revenue, the
Act of June 16, 1890, under which the application for refunding was
made, limited an adjustment of the claim
"to the extent that such taxes were deducted from any dividends
due and payable, and did not direct the adjustment of the claim to
the extent that taxes were deducted from interest or gross
receipts."
The acting Commissioner of Internal Revenue audited and adjusted
the claim made under the act of 1893 at its full amount, and as
incidental to such audit and adjustment, he assumed to reexamine
the claim allowed in 1891. The result of such reexamination of the
latter claim was a reduction to the extent of $3,548.89, which sum
was deducted from the amount allowed under the act of 1893,
reducing it to the sum of $31,359.02. When the claim reached the
first comptroller, a further sum of $17,633.85 was deducted by him,
which consisted principally of the amount allowed and paid in 1891
for taxes on surplus, which left a balance payable to the City of
$13,725.17, for which sum the comptroller directed a draft to be
issued. To recover the amount thus deducted from the claim as
audited and allowed under the act of 1893, the City of Louisville
commenced this proceeding in the Court of Claims, which rendered
judgment in its favor for the amount demanded. The government has
brought the case here for review.
Page 169 U. S. 253
MR. JUSTICE PECKHAM, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The claim here made is that the officers of the government
committed an error in auditing and allowing the amount paid in 1891
for taxes on surplus, as those taxes, it is said, were not referred
to in the act of 1890, and should not have been reported to
Congress or ordered paid by it, and that the power to review this
action (if not previously existing) was created by the act of 1893,
above set forth.
We think the judgment of the Court of Claims is right. By the
payment under the act of 1891, the questions involved were ended.
It was not only an auditing and allowance by the proper officers of
the Treasury of a claim over which they had jurisdiction, but the
amount was paid under the direct commandment of an act of Congress
specifically appropriating the particular sum reported to it as due
to the City of Louisville and for the payment of which the
authority of Congress was needed.
Laying for a moment the act of 1893 out of view, it seems clear
to us that there was no power on the part of the officers of the
Treasury to reexamine the correctness of the claim paid by virtue
of the act of 1891, or to reverse that action on the ground that a
mistake of law had been made in the decision reported to Congress
upon which it passed the act last named. The officers who acted
under the statute of 1890 (the Secretary of the Treasury and the
Commissioner of Internal Revenue) performed their duties in
examining, auditing, and allowing the claim as they thought the
facts and the law required. It was not the case of an allowance of
an ordinary claim against the government by an ordinary accounting
officer any more than was the case of
United States v.
Kaufman, 96 U. S. 567.
96 U. S. 570,
or that of
United States v. Savings Bank, 104 U.
S. 728. When the decision of these officials was by the
Secretary of the Treasury reported to Congress and an appropriation
made
Page 169 U. S. 254
by that body in 1891 of the specific sum mentioned in the
report, with directions to pay the amount thus appropriated to the
City of Louisville, the time for examination had passed and it was
the duty of the proper officers of the government to pay the money
as directed by the statute.
We also think the subsequent statute of 1893 gave no right to
the Treasury officers to interfere with or in any manner to review
the action of the government under the statutes of 1890 and 1891.
It may be true that a small portion of the claim made by the city
under the act of 1893 had theretofore been made under the act of
1890, but that portion had then been rejected, and of course never
audited, allowed, or paid. Because a small sum which had once been
rejected was included in the principal claim made by the city in
1893, no sort of foundation was thereby laid for the assertion of a
right on the part of the government to review, and, in substance,
reverse, the prior action of the Treasury Department in allowing a
claim which had been thereafter affirmed by Congress with a
substantial direction to pay the amount thereof, and which had been
paid accordingly.
The authority given by the act of 1893 required the officers
therein named to audit and adjust the claims of the City of
Louisville for internal revenue taxes to the extent that such taxes
were deducted from any dividends or interest due and payable to the
city, and which had not been theretofore refunded, and, for this
purpose, the statute of limitations was repealed and certain
sections of the Revised Statutes were made applicable, and the
amounts, when ascertained and not theretofore refunded, were
directed to be paid out of the permanent annual appropriation
provided for similar claims allowed within the present fiscal year
(1893). We think this provision gave no jurisdiction to interfere
with or to review the action of the Treasury officials under the
act of 1890 or the action of Congress in enacting the statute of
1891.
The act of 1891 was in the nature of a judgment, final in its
character and subject to no appeal, and the duties of the officers
of the government thereafter charged with the payment of the moneys
appropriated by that act were not discretionary,
Page 169 U. S. 255
and were limited to the clerical functions of making payment, as
directed by the act.
United States v. Jordan, 113 U.
S. 418. It cannot be possible that Congress had the
least intention, when making provision for the payment of other and
further claims of the same character, to in any wise open the
transactions which had been closed by the payment of the moneys
directed by the act of 1891. We have no doubt whatever that if
Congress had any such intention, it would have made it clear by the
use of far different language from that which is contained in the
act of 1893. It would have said in so many words that in proceeding
under the statute of 1893, the officers named therein should
examine into the correctness of the decisions arrived at in 1890
and 1891.
The judgment of the Court of Claims was right, and it should
therefore be
Affirmed.
*
"Chap. 165. An act for the benefit of the State of Kentucky,
Logan, and Simpson Counties, and of Louisville, Kentucky, and of
Sumner and Davidson Counties, Tennessee."
"
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, that the
Commissioner of Internal Revenue, with the approval of the
Secretary of the Treasury, be, and he is hereby, authorized and
required to audit and adjust the claims of the Sinking Fund
Commissioners of the State of Kentucky, of Logan and Simpson
Counties in said state, of the City of Louisville, Kentucky, and of
Sumner and Davidson Counties, Tennessee, for internal revenue taxes
collected on railroad dividends on stock and on interest on
railroad bonds owned by said counties and city, respectively, in
the Louisville and Nashville Railroad Company, and of said state
for internal revenue taxes collected and interest on railroad bonds
of the railroad from Louisville to Lexington and on dividends on
stock of said railroads owned by said state, and due and payable to
said boards of sinking fund commissioners, respectively, and to
said state, counties and city, to the extent that such taxes were
deducted from any dividends or interest due and payable to such
boards, respectively, and which have not been heretofore refunded,
and for this purpose any statute of limitations to the contrary
notwithstanding, sections nine hundred and eighty-nine, thirty-two
hundred and twenty, thirty-two hundred and twenty-six, thirty-two
hundred and twenty-seven, and thirty-two hundred and twenty-eight
of the United States Revised Statutes are hereby made applicable
and available with the force and effect, as if protest and demand
for payment had been made within the time prescribed by said
sections, and the amounts, when ascertained, as aforesaid and not
heretofore refunded, shall be paid out of the permanent annual
appropriation provided for similar claims allowed within the
present fiscal year."
"Approved February 25, 1893."
