the execution of the bond, was limited to the acceptance of a bond for an extension of payment of taxes not to exceed eighteen months from November 23, 1921, the date of the passage of the act of 1921. The surety company also further avers that the bond was given to indemnify the plaintiff against loss by reason of the extension of time and that no recovery may be had because the plaintiff has not suffered loss as "Charles H. Clark, at the time of giving of the bond was unable to pay the tax which he owed."
If this suit were an action for the recovery of the tax in question, as such, unquestionably the affidavit of defense would be sufficient because the statutory period for such action has expired. The present action, however, is one to recover an amount which defendant undertook to pay; that such amount was based upon an amount of tax admittedly due is of small moment here. By execution and delivery of the bond and acceptance thereof by the United States, the claim upon the bond was substituted for the claim based upon the statutory right to recover tax due. In other words, the statute of limitations applicable to the beginning of actions based upon taxes due does not apply to actions based upon bonds under seal.
No direct statutory authority exists for the acceptance of this bond by the Collector of Internal Revenue. The main question for determination under the present motion for judgment is as to the legal force of a bond conditioned as is that in the instant case, in the absence of specific statutory authority therefor. Passing by the fact that the instrument is under seal and a proper consideration presumed, sufficient consideration appears in the extension of time granted the taxpayer. Nor does it seem that any great weight exists in the contention that the bond was given to indemnify the United States merely against loss or damage occasioned by reason of an extension of time in which to pay the tax. The bond admits the indebtedness and is a direct obligation to pay.
As before stated, no statute specifically authorizes the delivery or acceptance of a bond such as that in suit. That fact does not invalidate the bond. The United States government, in the political capacity, has a right to enter into a contract, or to take a bond, in cases not previously provided by law. United States v. Tingey, 5 Pet. 115, 8 L. Ed. 66. It has ratified the act of the Collector in accepting the bond in suit by the present action upon it. Miami Valley Fruit Co. v. United States (C.C.A.) 45 F.2d 303. Also United States v. Bradley, 10 Pet. 343, 9 L. Ed. 448. Practically parallel with the instant case is United States v. Converse Cooperage Co. (D.C.) 42 F.2d 227, wherein a bond given to secure the payment of taxes was held to be valid although given pursuant to no statutory provision.
It was urged upon argument that the instant bond was void because obtained by duress. No facts indicating duress have been recited in the affidavit of defense and therefore no claim of its existence in argument can be of any avail in support of the affidavit of defense. Even if the verbal allegations of argument were read into the pleading, such claims would be insufficient. In proceeding by distraint, or by threat of distraint, to collect the tax admittedly due, the Collector was acting legally and such action forms no basis for a claim of duress in accepting a bond for the purpose of extending the time for payment of the taxes. Burnet v. Chicago Railway Equipment Co., 282 U.S. 295, 303, 51 S. Ct. 137, 75 L. Ed. 349, and Miami Valley Fruit Co. v. U.S., supra.
In the instant case the taxpayer voluntarily admitted that the tax claimed by the government was due, and secured, by means of the bond in suit, an extension of time sufficient to preclude the government from proceeding for its collection by distraint or other method. Under such circumstances, defendants are estopped from asserting invalidity of their obligation.
We are of opinion that the affidavit of defense does not set up any legal or valid defense to the plaintiff's claim, therefore judgment will be entered against defendants upon plaintiff's motion.
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