Appeal from the District Court of the United States for the Western District of Pennsylvania; Nelson McVicar, Judge.
Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.
The appellant taxpayer had overpaid its income and profits taxes for the year 1919. Having failed to avail itself, within the statutory period, of the remedy by which it could recover the overpayment in proceedings for a refund of a tax illegally assessed or collected (section 3226, R.S. [26 USCA § 156]), it brought this suit on a certificate of overpayment by the Commissioner of Internal Revenue on the theory that it could recover on the government's implied promise to pay what the Commissioner had certified was due it. The main question in the case is not whether such an action will lie upon a proper state of facts but is whether the learned trial court erred in holding, on demurrer, that a claim for refund (as in a tax suit) is a condition precedent to bringing a suit of this kind and whether, in default of such prior claim, it erred in entering judgment for the government. But the government says even if the plaintiff is right in its theory of the case, its "petition does not state a cause of action for the reason that it does not affirmatively appear therein that suit was brought within six years of the accrual of the cause of action" under the statute. Judicial Code, § 24 (20), title 28, U.S.C., § 41 (20), 28 USCA § 41 (20).
Feeling that the matter might be jurisdictional and therefore, as under other statutes, to be shown, affirmatively, Arnson v. Murphy, 115 U.S. 579, 6 S. Ct. 185, 29 L. Ed. 491, the plaintiff took two positions: One by a motion that the case be remanded with leave to apply to the District Court for leave to amend by adding allegations that would bring it within the statute; the other that, anyhow, the suit was brought within six years of the accruing of the cause of action.
Under the provisions of section 701, R.S. (28 USCA § 876), made applicable to the Circuit Courts of Appeals (26 Stat. 829, § 10 [28 USCA § 877]), appellate courts have given leave to amend for a jurisdictional purpose when a judgment has been reversed and the case sent back for re-trial, Robertson v. Cease, 97 U.S. 646, 24 L. Ed. 1057; but we have been shown no federal authority or practice which authorizes an appellate court, before rendering its decision on appeal, to remand a case for amendment as to facts which will bring it within a statute of limitations. After remand, the case, no longer in the appellate court, would be back in the trial court. There, in order to amend the pleadings, the judgment would have to be vacated and the case opened and, when opened and amendment allowed, it would require a re-trial on the new facts, all after the term of the judgment. This would approach perilously near the forbidden situation in Montgomery v. Realty Acceptance Corporation (C.C.A.) 51 F.2d 642; Id., 284 U.S. 547, 52 S. Ct. 215, 76 L. Ed. 476.
Moreover, in the case at bar, the plaintiff had, under the rules, an opportunity to amend after the court had sustained the government's demurrer, but it elected to "stand upon its original petition heretofore filed herein and not to amend or file any further pleading by way of a petition." In other words, on its election the judgment on demurrer was not respondeat ouster but was final, and as conclusively final as though on verdict. We shall not hazard a remand of the case for the purpose of amendment.
Accordingly, the case will be decided on the record as made. It presents two questions: One, the jurisdictional question of bringing the suit within six years of the accrual of the cause of action; the other, if suit was seasonably brought, whether on demurrer the judgment for the government is right.
On both of these questions the record must be read in the light of the decision in Bonwit Teller & Co. v. United States, 283 U.S. 258, 265, 51 S. Ct. 395, 75 L. Ed. 1018, rendered after the judgment in this case, on which alone the plaintiff can prevail. We construe that decision as the plaintiff construes it and, indeed, as the defendant itself now construes it, in that it declares that a taxpayer who has overpaid his tax has a right to sue on the government's promise to pay which is implied in a certificate of overpayment made and delivered by the Commissioner of Internal Revenue. To find out whether the plaintiff pleaded its case within the law of the Bonwit Teller decision, not, for the moment, as to its right to recover but as to whether the action is within the statute of limitations, it is necessary to see how Bonwit Teller & Company pleaded its case. The court said (page 265 of 283 U.S. 258, 51 S. Ct. 395, 398) in that respect:
"Plaintiff pleaded its claim in two forms. The first is based upon the issue and delivery of the Commissioner's certificate showing plaintiff entitled to a refund in the amount specified. The second alleges an account stated showing that there is due plaintiff the amount claimed. The action is not for the overpayment of the tax in 1919, but is grounded upon the determination evidence by the certificate issued by the Commissioner May 12, 1927. Upon delivery of the certificate to plaintiff, there arose the cause of action on which this suit was brought."
Turning to the plaintiff's petition, the first five paragraphs are formal, showing the parties, the assessment of the tax for 1919 and the audit by the Commissioner determining that the tax was overpaid in the sum of $22,952.16. By the sixth paragraph the plaintiff averred that:
"On February 26, 1924, the Commissioner of Internal Revenue signed Schedule of Overpayments * * * and directed the Collector of Internal Revenue at Pittsburgh, Pennsylvania, to examine the accounts of petitioner and to apply any part of said sum of $22,952.16 as a credit against additional taxes for other years which might be due and unpaid. Said Collector subsequently, to-wit, on April 28, 1924, examined the accounts of petitioner and applied $10,351.71 of said sum of $22,952.16 as a credit against the additional income and profits taxes for 1917 * * *, (admittedly barred by the statute of limitations). Thereafter said Commissioner approved such action of said Collector of Internal Revenue." (What happened to the remainder of the overpayment of $22,952.16 does not appear and is not here involved.)
By paragraph 7 it is averred that no part of this $10,351.71 has been paid the plaintiff. Accordingly it brought suit (under the Tucker Act, 24 Stat. 505 [see 28 USCA § 41 (20)]) for $10,000 of that sum. But it brought suit on April 24, 1930, or six year and two months after the Commissioner had signed the schedule of overpayment.
From this statement of the pleading it is clear the plaintiff brought its suit not on an account stated, one of the causes of action in the Bonwit Teller Case, but on the government's promise to pay implied in the Commissioner's ...