Section 29 of the War Revenue Act of June 13, 1898, which taxed
legacies and distributive shares at so much per hundred dollars of
clear value, was repealed by the Act of April 12, 1902, with a
proviso saving all taxes imposed by § 29 prior to July 1, 1902,
when the repeal became effective. In an action against the United
States to recover taxes computed, returned, and voluntarily paid by
executor after July 1, 1902, on legacies paid over before that
1. That a formal assessment prior to July 1, 1902, was not
necessary to bring the taxes within the saving clause as taxes
"imposed" prior to that date. P. 254 U. S.
2. That such assessment was not necessary to ascertain the value
of life interests in trust funds, their value being ascertainable
by computation upon mortality tables and rules lawfully adopted by
the Commissioner of Internal Revenue. Id. See Simpson
v. United States, 252 U. S. 547
3. That the fact that the estate was not completely settled and
that the legatees and trustee might be liable to refund if retained
asset proved insufficient to pay all claims was no ground for
recovery of the taxes, in view of the facts that the personal
estate greatly exceeded in value the amount of the legacies, and
the total of claims and expenses during many years after the
commencement of administration was comparatively insignificant. P.
254 U. S.
4. One who seeks to recover money voluntarily paid as a tax upon
the ground that the tax was illegal must prove its illegality, and
may not rely on mere assertion and speculation. P. 254 U. S.
54 Ct.Clms. 219 affirmed.
The case is stated in the opinion.
Page 254 U. S. 388
MR. JUSTICE McKENNA delivered the opinion of the Court.
Appeal from a judgment of the Court of Claims denying recovery
of taxes paid under the War Revenue Act of June 13, 1898, and
amendments, upon certain legacies made under the will of William F.
The facts so far as we deem them material are as follows:
Cochran died in New York, December 27, 1901, leaving a will and
a personal estate of the value of $7,918,027.18 of which appellees
and Era S. Cochran were made executors. The latter has since died.
The will was probated January 9, 1901, and letters testamentary
issued the same date and administration was immediately undertaken
and proceeded with without extraordinary or unnecessary delay.
Six months' notice to creditors was given as required by the law
of New York, and the time for the presentation of claims expired
August 4, 1902. Prior to September 30, 1902, debts and claims
against the estate were presented and for the most part paid to the
aggregate amount of $98,589.04, of which amount $66,776.25 were
paid prior to July 1, 1902. Expenses of administration during that
period had been ascertained to be $125,000, of which sum $13,047.16
were paid prior to July 1, 1902. Otherwise, claims and expenses of
administration had not been ascertained.
Certain sums were bequeathed to the executors in trust for the
children of Cochran, and there was also a legacy to a niece and one
to a stranger to his blood. Trusts were set up in accordance with
the will, and the legatees were paid prior to July 1, 1902, the
sums provided to be paid. The aggregate payment so made amounted to
the sum of $3,140,979.10.
Page 254 U. S. 389
In 1892 and 1893, litigation was instituted against the decedent
which might involve the estate, it was estimated, in the payment of
several hundred thousand dollars or more. The litigation, according
to the findings of the Court of Claims, is still in progress, and,
on account of it, money has been retained by the executors that
might otherwise have been distributed. The probable outcome of the
litigation is not shown.
Under the laws of New York, funds in the hands of executors
after the expiration of notice to creditors are liable to
after-discovered debts, and legatees who have received money prior
to the expiration of such notice are liable up to the amount paid
them for claims subsequently presented. The executors were not
secured for the payments to legatees prior to July 1, 1902, and,
prior to that date, the value of the residuary estate had not been
In compliance with § 30 of the Act of June 13, 1898, the
executors on February 17, 1903, made a return and filed it with the
collector of internal revenue giving a schedule of the legacies
arising from the personal property of the estate and the amount of
tax due thereon. The collector accepted the schedule as correct.
The amount paid to him by the executors was the amount they
estimated as the amount of the taxes due. The schedule showed the
taxes on each legacy, and that the total was $158,321.78, which sum
was by the collector paid to the United States.
July 16, 1904, a demand was made upon the Commissioner of
Internal Revenue for the repayment to the executors of the sum
paid. After one rejection (October 22, 1910), the Commissioner
(March 15, 1915) recommended the claim for allowance in the sum of
$107,292.24, and for the rejection of $51,029.54. The
recommendation was approved by the Secretary of the Treasury. The
former sum was paid; the latter was not, and remains
Page 254 U. S. 390
This sum was computed in respect to the interest of eight
different legatees, of which six were residuary legatees, and the
computations were made according to certain general rules, tables,
and instructions for the use of internal revenue officers,
administrators, and trustees in determining the amount of taxes to
be paid to the United States upon legacies or distributive shares
arising from personal property under the Act of June 13, 1898.
There was no special investigation by the Commissioner of Internal
Revenue as to the expectancy of life of the several beneficiaries
or as to the earning power of the bonds placed in trust for them
respectively, and for their benefit.
The contentions of the parties are quite accurately opposed. The
appellees contend that an assessment was a necessary condition to
the collection of the taxes, and that there was no assessment until
after July 1, 1902, and that, on that date, the law which
established the taxes was repealed.
In opposition, it is urged by the United States that, if an
assessment was necessary, the right to make it was reserved by the
repealing act, and that the appellees, as executors, having made a
report of the legacies and the taxes thereon, the report and its
acceptance by the collector of internal revenue was to all intents
and purposes an assessment. It is further urged that, if an
assessment was necessary for the purpose of collecting the taxes,
it is now immaterial.
These contentions constitute the issue in the case, and depend
upon the relation of the law (mostly statutory) to the facts and
what it determines. As an element in the determination, the use of
the rules of the department and the mortuary tables counsel
dismisses from controversy, in concession to Henry v. United
States, 251 U. S. 393
Simpson v. United States, 252 U.
. The remaining element, -- that is, the necessity
of an assessment prior to July 1, 1902, to the validity of the
taxes in question --
Page 254 U. S. 391
counsel for appellant says, revolves "upon the meaning and
application of the word imposed,' the fifth word in the special
saving clause of the repeal act of April 12, 1902." And counsel
defines the word to include all of the steps necessary to the
collection of a tax, making it tantamount to "accrued." In other
words, the contention is that a tax is not "imposed" by the simple
declaration of a law that property shall be subject to it, but
"imposed" only when the tax becomes due and payable, and that the
taxes in the present case had not reached that essential condition
before July 1, 1902, because they had not been assessed. In support
of the contention, counsel cites Mason v. Sargent,
104 U. S. 689, and
Hertz v. Woodman, 218 U. S. 205.
There is much in the latter case which, it may be urged, is adverse
to the contention, but upon this we are not called upon to pass,
for counsel concedes that, if a statute imposes a tax in such way
as that the amount is readily reduced to a certainty, no assessment
is necessary. And this is true of the taxes in question.
By Section 29 of the Act of June 13, 1898, 30 Stat. 448,
legacies or distributive shares such as this case is concerned with
are made subject
to a duty at the rate of 75 cents for each and every $100 of the
clear value thereof, and the tax is made a lien and charge for 20
years and its payment required before payment and distribution to
the legatees. The section also requires the trustee to make and
render to the collector a schedule, list, or statement of the
legacies together with the amount of duty that has accrued or shall
accrue thereon. Section 30 was amended March 2, 1901, but no change
in anything important to the present controversy. Section 29 and
the amendments of March 2, 1901, were repealed by Act of April 12,
1902, c. 500, 30 Stat. 97 et
Page 254 U. S. 392
but it was provided that "all taxes or duties
imposed by § 29 . . . and amendments thereof, prior to the taking
effect" of the repealing act should "be subject, as to lien,
charge, collection and otherwise, to the provisions of § thirty . .
. and amendments thereof," which are hereby "continued in force."
Except as so continued in force, the repealing statute took effect
July 1, 1902.
The schedule under § 29 was rendered, as we have seen, accepted
by the collector, and taxes were paid in accordance therewith in
the sum of $158,321.78.
The schedule included legacies that had been paid after July 1,
1902, but as by Act of June 27, 1902, c. 1160, 32 Stat. 406, such
legacies were not subject to a tax, the taxes on them were refunded
upon demand of the executors, but the government refused to refund
the taxes on legacies paid prior to that date. This suit was
brought for their amount -- that is, the sum of $51,029.54.
To support recovery, it is contended that there was no
obligation of payment because, as has already been said, the amount
to be paid was not made certain by assessment, or, to quote
counsel, was not
"so certain (or capable of such ascertainment) that reasonable
minds could not disagree, and that the exercise of judgment and the
consideration and weighing of evidence could not affect the
For this, Hagar v. Reclamation District, 111 U.
, and other cases are cited and reviewed.
But we cannot agree that there was uncertainty. We have seen the
amount of taxes imposed by the statute was definite, and the
appellants had no trouble in estimating and returning the value of
the legacies upon which it was imposed. The basis of the claim of
uncertainty is that the estate was and is not settled and that
there is a possibility that the legatees may be called upon to pay
debts. The contention is as strained and baseless as that rejected
in Simpson v. United States, supra.
Page 254 U. S. 393
It is to be remembered, besides, that the case does not present
a case of resistance to the payment of a tax, but of the recovery
of taxes voluntarily paid, and that therefore the illegality of
them should be shown not only by averment, but by proof, not, as it
is attempted to be, by assertion and speculation. It is true that
it is averred that, prior to July 1, 1902, the amount of claims
against the estate had not been ascertained, and that there was
responsibility upon the trustees and legatees to make a return of
the whole or ratable portions of the legacies to the extent that
the sums remaining in the estate should be insufficient to satisfy
all valid claims. It is conceded, however, the contingency of this
might have terminated August 1, 1902, and while it is averred that
the clear value of the interests of the legatees was at all times
prior to July 1, 1902, uncertain and indefinite, and still is so,
there stand in opposition the facts of the case and the refutation
that an estate of the net personal value of nearly eight million
dollars was or is in danger of embarrassment by the payment of
legacies of less than one million dollars. And we have seen that
the executors, who had knowledge of the condition of the estate,
and all that it might be made subject to, did not hesitate to make
a return of the legacies to the collector of internal revenue and
pay the taxes thereon. The petition in this case was filed in the
Court of Claims June 23, 1916, fourteen years after the
commencement of the administration of the estate and nearly as long
after the time of presentation of claims against it, and the record
shows that the total of the claims and expenses of administration,
including funeral expenses, amount to the sum of $235,700. In the
fact of this exhibition we are asked to speculate upon possibility
of the existence of liabilities that fourteen years have not
* We disregard a distinction in the legacies as not important to