erroneously collected and that the taxpayer is entitled to a refund, the Commissioner is acting in a quasi-judicial rather than a ministerial capacity. United States v. Detroit Steel Products Co., D.C., 20 F.2d 675, 677.
In this connection, it must be kept in mind that the Supreme Court of the United States, in the Arkansas Corporation Commission case, supra, stressed the fact that the Arkansas Corporation Commission was not acting ministerially, but "on the contrary, it is a quasi-judicial agency entrusted with wide responsibilities in connection with the general tax system of the state."
In the case of In re Gould Mfg. Co., D.C., 11 F.Supp. 644, 648, it was held under Section 64 sub. a of the Bankrupt Act, 11 U.S.C.A. § 104 sub. a:
"* * * when an initial assessing functionary, upon ample evidence, makes a determination within the powers granted by law, his or its judgment and discretion thereon, honestly exercised, is not subject to substitution or mere revision by any judicial tribunal. What is meant is that, ordinarily, judgments of assessors, upon appraisement or assessment of values, are not subject to revisory judgments of courts. They are not subject to judicial power to apply either the same rule, or, optionally, a different rule with a resultant, in whole or in part, to substitute the application judicially to the same subject-matter, which was actually or potentially before the initial statutory assessing, or the statutory reviewing, functionary. * * *
"Matters of common and settled experience in the assessment and levy of taxes, and the uniform insistence, both in the states and in the nation, upon certainty of imposition and inescapability of obligation to pay, alone raise the serious question whether in the Bankruptcy Act there is any expression of purpose to permit the courts, which cannot discharge a tax and are bound to pay it in full, if legal, nevertheless to revise, mitigate, or wipe it out. " (Emphasis supplied.)
In Metropolitan Life Insurance Co. v. United States, 6 Cir., 107 F.2d 311, it was held that where the Federal government's lien for taxes once attaches it may be lifted only as provided by statute; and further, that the jurisdiction of the Federal District Courts is limited not only by the Constitution but also by acts of Congress. Said the court (page 314 of 107 F.2d):
"The United States as a sovereign may be sued only with its consent. It follows that the Congress has the power to prescribe not only the methods by which and the conditions under which tax liens on real estate may be released but also to limit the right to sue therefor and no suit may be maintained against the United States for such purpose unless strictly within the terms of the Statute (Jud.Code § 24(20), 28 U.S.C.A. § 41(20), under which consent is given. Banco Mexicano, etc. v. Deutsche Bank, 53 App.D.C. 266, 289 F. 924, affirmed in 263 U.S. 591, 44 S. Ct. 209, 68 L. Ed. 465; Rand v. United States, 249 U.S. 503, 510, 39 S. Ct. 359, 63 L. Ed. 731; Price v. United States & Osage Indians, 174 U.S. 373, 379, 19 S. Ct. 765, 43 L. Ed. 1011; United States v. Michel, 282 U.S. 656, 660, 51 S. Ct. 284, 75 L. Ed. 598; Tucker v. Alexander, 275 U.S. 228, 232, 48 S. Ct. 45, 72 L. Ed. 253.
" The right of the plaintiff to a release of the lien here in question is purely statutory and the jurisdiction of the Court may not be enlarged by implication. The question to be determined is not what binding effect the power of sale conferred by the mortgage had on subsequent lienors, and it matters not what may seem to the Court equitable in the premises. Appellant's action was predicated on the theory that the United States had some sort of lien on the premises which it was seeking to lift in accordance with the terms of the Statute. Since the statute does not expressly or impliedly give the Court power to discharge the lien by decree, the only statutory method by which it may be done is sale. * * *" (Emphasis supplied.)
It is the government's contention that the bankruptcy court has jurisdiction to vacate the discharge of the tax liens and to reinstate them, under the general equity powers of the United States District Court, in view of the referee's finding "that the Commissioner of Internal Revenue was misled into granting these discharges by the false representations in Baker's application and his failure to reveal matters that were within his knowledge".
However, it is well settled that "The District Court does not possess the general power to entertain a suit in equity, and, unless the bankrupt act has conferred upon it jurisdiction to entertain a plenary suit in equity, such a suit cannot be maintained". Smith et al. v. Chase National Bank of the City of New York, 8 Cir., 84 F.2d 608, 615.
Quoting from the same opinion (page 615 of 84 F.2d): "In Chauncey et al. v. Dyke Bros. et al. [8 Cir.], 119 F. 1, 3, this court, speaking through Judge Thayer, said: 'The bankrupt court had no rights to assume jurisdiction of a controversy between third parties, in which the trustee was not concerned, and decide whose claim was paramount in equity, merely because the claimants happened to be creditors of the bankrupt estate, or merely because the liens affected a part of the bankrupt's property. The bankrupt act confers no such authority.'"
In the instant case, the government frankly concedes that the action of the referee in vacating the discharge of the tax liens is without precedent.
I have made an exhaustive investigation and have failed to find a single case where there was a vacation of a discharge of a lien whether in bankruptcy proceedings or otherwise.
In conclusion, then, I find that the bankruptcy court is without jurisdiction in the matter, and that the referee erred in vacating or setting aside the discharge of the Federal tax liens.
Accordingly, the action of the referee is reversed.