
    EDWARD B. LEISENRING, DANIEL B. WENTZ, JR., AND FIDELITY-PHILADELPHIA TRUST COMPANY (FORMERLY FIDELITY TRUST COMPANY, EXECUTORS OF THE ESTATE OF DANIEL B. WENTZ, DECEASED, v. THE UNITED STATES
    [No. L-221.
    Decided June 5, 1933.
    Motion for new trial overruled, with opinion, November 6, 1933]
    
      Mr. Spencer Gordon and Mr. Marion P. Wormhoudt for the plaintiffs. Covington, Bv/rling <& Rublee were on the briefs.
    
      Mr. John A. Rees, with whom was Mr. Assistant Attorney General Charles B. Rugg, for the defendant.
   Green, Judge,

delivered the opinion of the court:

The plaintiffs are executors of the estate of Daniel B. Wentz, deceased, who died February 8, 1926.

This suit is brought upon what the plaintiffs claim to be an account stated for $34,814.04 due the deceased. The evidence shows that the Commissioner, on May 15, 1924, signed a schedule of refunds and credits which showed an overpayment of $77,338.94 on the taxes of the deceased for 1919, of which $34,814.04 was credited in the same schedule against that amount of an additional assessment for 1917. The additional tax for 1917 had been assessed in time, but collection was barred by the statute of limitation of five years provided in section 250 of the Revenue Act of 1921 at the time collection was made by the credit. In accordance with this schedule of refunds and credits, a certificate of mverassessment was later prepared by the Commissioner showing that the testator’s tax for 1919 had been over-assessed in the amount of $77,338.94, and that “ the report of ■the internal-revenue agent in charge, dated October 17, 1923, had been approved by this office as to the adjustment for this year.” The certificate further went on to state, “ The ■amount of the overassessment will be abated, credited, or refunded, as indicated below ”, and also, “ If an overpayment has been made and other taxes are due, credit will be made accordingly, and any amount refundable is covered by Treasury check transmitted herewith.” Notations on the certificate made “ below ” showed that of the overassessment, '•'$34,814.04 had been credited on additional taxes for the year 1917 and that $42,524.90 was refunded. This certificate, together with a Treasury check for the amount of the refund ■of $42,524.90 was delivered to the testator about June 15, 1924. After the death of Daniel B. Wentz and on May 13, 1930, the executors of his estate made application to the Commissioner of Internal Revenue for interest on the overpayment for the year 1919 and for a refund of $34,814.04 of the 1919 overpayment which had been credited against taxes -of 1917. In this claim they set out a copy of the certificate ■ of overassessment for 1919 and alleged that the interest was due thereon and that the credit above referred to was void, not having been made within the statutory period applicable thereto. This claim was denied. The petition was filed and the suit begun June 10, 1930.

This case, like many others, turns on the question of whether the suit was brought in time, and the parties agree that unless the suit can be based on an “ account stated ” the period of limitations for its commencement has expired. It is contended on behalf of the plaintiffs that the certificate of overassessment referred to above constituted an account stated in favor of the taxpayer for $34,814.04 and that consequently the plaintiffs had six years from the time it was delivered to the taxpayer in which to bring suit and that, the suit having been instituted June 10, 1930, it was begun in time. The defendant contends that the acts of the Com.missioner, including the delivery of the certificate of over-assessment, did not constitute an account stated in showing anything due the taxpayer, and that if there was any account stated through the certificate of overassessment it showed that nothing was due the taxpayer after receipt of the refund allowed therein. It is also insisted on behalf of the defendant that interest on the amount claimed cannot in any event be recovered, but as we view the case it will not be necessary to consider the point thus raised.

A number of transactions between the deceased and the Commissioner with reference to the taxes in suit and other taxes are shown by the findings of fact in addition to what we have set out above in the opinion, but we do not think it is necessary to refer to them as, in our opinion, they do not affect the determination of the case.

In our view, the decision herein is controlled by the case of David Daube v. United States, 75 C.Cls. 633, 59 Fed. (2d) 842, and the opinion of the Supreme Court affirming the decision of this court in David Daube v. United States, 289 U.S. 367. In the opinion rendered by this court in the Daube ease, supra, it is stated that there are certain well-settled principles from which no court has ever varied which apply to an account stated. Among them is the rule that the parties must agree upon the balance struck, that there must be a promise, express or implied, for the payment of such balance, and that where there are mutual or cross demands the parties must come to an agreement as to the allowance or disallowance of the items composing the account, but especially “there must be an adjustment, a balance struck, and an assent to the correctness of the balance.” Further, that “ the parties cannot state an account by agreeing to part of the items, and leaving the others open for future adjustment or litigation ”, and that “ the test of an account stated is that the minds of the parties met as to the amount due.” Nor does it make any difference that a claim made in the account may be groundless, although if any part of the claim is disputed so that the balance stated is not admitted it does not become an “ account stated.” This last is particularly applicable to the case now before us for the reason that the defendant in the account charged the taxpayer with a credit on the taxes of 1917, although the time bad expired within which they could legally be collected. In the same case we also said: “ The admission of one item in the account of the transactions between the parties offset -by another item will not support an action on an account stated as to the item admitted, although it may constitute evidence of the correctness thereof in an action otherwise commenced.” The authorities supporting these rules are too numerous for citation.

Applying these principles to the certificate of overassess.ment which was delivered to the taxpayer and the schedule of refunds and credits which evidently in some way came to ' the knowledge of the executors, we are clear that there was no account stated to which both parties gave assent. The -sheet entitled “Certificate of overassessment” did indeed ■ show the overassessment, but this was only one item of the account which was also- shown by the same paper. The document showed that in defendant’s statement of the ac- • count the item of $34,814.04 was credited upon the testator’s taxes for 1917 and that the balance due the taxpayer was ' $42,524.90, which was accordingly refunded to him by check. This amount was the balance struck in the account as stated by the Commissioner, but the evidence shows that the taxpayer did not agree to this balance, and that the defendant did not agree that $34,814.04 was due the taxpayer. Consequently there was no “ account stated.”. See Ellis P. Earle v. United States, ante, p. 161.

We find nothing in the decision of the Supreme. Court affirming the Daube ease, supra, which is in conflict with what we have set out above. On the contrary, we think that the opinion therein shows that the Supreme Court had no intention by the decision in the case of Bonwit Teller & Co. v. United States, 283 U.S. 258, to overturn principles which have been agreed upon by all the courts of this country and remained settled for nearly a century, as seems to be contended on behalf of plaintiffs. In the Danube case, supra, the Supreme Court cited with approval the case of Newburger-Morris Co. v. Talcott, 219 N.Y. 505, 512, in which the Court of Appeals said:

“ But the very meaning of an account stated is that the parties have come together and agreed upon the balance of indebtedness, insvmul computassent, so an recover the balance as upon an implied promise of payment-may thenceforth be maintained.”

In the next to the last paragraph of the opinion in the Daube ease the Supreme Court stated in substance that the decision in the Bormit Teller case, supra, was limited in its application to cases where the evidence is such that “ it sustains the inference of an agreement that the tax shall be repaid.” In this case, instead of sustaining any such inference, the evidence clearly shows the contrary. Previous to the issuance of the certificate of overassessment upon which suit is brought the taxpayer had filed claims for credit of the 1918 overpayment against the 1917 additional tax. Instead of making this credit, the certificate upon which plaintiffs now rely was issued showing an overassessment for the year 1919 in the amount of $77,338.94, and a balance was struck therein between the taxpayer and defendant by crediting $34,814.04 (the amount for which suit is now brought) upon additional taxes for the year 1917 and refunding to the taxpayer by check $42,524.90. The check and the certificate of overassessment were issued June 13, 1924, and delivered to Daniel B. Wentz about June 15th of the same year. The petition herein was filed a few days before the expiration of six years from the time the certificate was delivered. Daniel B. Wentz, so far as the record shows, accepted the check which had been sent him without making any protest or objection thereto, but nearly six years after-wards the executors of the estate filed a claim for interest on the overpayments allowed for 1918 and 1919 and for the refund of the $34,814.04 of the 1919 overpayment credited against the 1917 tax. If any inference at all could be drawn from these facts, it would be that Daniel B. Wentz agreed to the balance struck by the Government, but we are inclined to think that the mere fact that he accepted the check does not show that he agreed that the balance struck by the-Government was correct. The certificate of overassessment showed clearly how the Government computed the amount due the taxpayer and the remission of the check to him for-that amount was in effect a statement that $42,524.90 was the amount due him and payment was being made thereof. We-are at a loss to understand how it can be argued from this state of facts that the Government agreed that $34,814.04 more was due the taxpayer.

It is contended on behalf of the plaintiffs that the facts established in Bonwit Teller & Co., supra, make the same kind of a case as that which is now before this court. There may be much similarity between the actual facts in the two cases but there is a great difference in the facts submitted to the court. When the Bonwit Teller ease was submitted to this court there was not a line or even a word said in the brief of counsel for either party with reference to an account stated. There was an allegation in the petition to the effect that the Commissioner of Internal Revenue “ rendered a statement ” to the plaintiff in which statement the amount for which suit was brought “ was actually found and agreed to be due ” to the plaintiff, and a statement in argument that the action was for the recovery of this amount “ upon an allowed claim.” Apparently there was no> contention over these allegations, but it was contended on behalf of the Government that a refund could not be made because the provisions of the statute were not complied with. The Supreme Court therefore had no occasion to consider whether the facts in the case supported an account stated and we do not think it intended to determine that question. In view of the facts as found in the case now before this court and the language of the Supreme Court in the Daube case, supra, which we have quoted above, we are clear that the decision in the Bonwit Teller case, sufra, is not controlling in the case at bar.

The case of Parks & Woolson Machine Co. v. United States, 75 C.Cls. 204, 58 Fed. (2d) 868, is also cited in support of plaintiffs’ theory but the closing sentence of the opinion therein which reads, “ Recovery of the overpayment was barred when the suit was instituted, even if it had been grounded upon an account stated ”, we think shows that it was not intended to hold that an account stated had been established.

Nor do we find anything in Naumkeag Steam Cotton Co. v. United States, 76 C.Cls. 687, that conflicts with what we have said above. That case involved a very different state of facts from the one now before tbe court and an altogether different issue was raised by the defendant. Consequently nothing was said in the majority opinion which might even remotely refer to an account stated, or to the question of whether the suit was brought in time, which would have involved the discussion of matters not appearing in the case at bar. Having decided the case on the issues presented, obviously it was not necessary for the court to go further and decide some issue that had not been raised.

Our conclusion is that there is no evidence showing or tending to show an agreement, express or implied, to pay this sum to the taxpayer, and we have entered a finding of fact accordingly. As we find in effect and hold that there was no account stated, it follows that plaintiffs’ action to recover the amount of the credit is barred. The credit was definitely granted on May 15, 1924, when the Commissioner approved and signed the schedule of refunds and credits. Any cause of action for interest accrued at that date, and is therefore also barred.

It follows from what has been stated above that plaintiffs’ petition should be dismissed, and it is so ordered.

Whalet, Judge, and Williams, Judge, concur.

Booth, Chief Justice, did not hear this case, on account of illness, and took no part in its decision.

Littleton, Judge,

dissenting:

Plaintiffs sue to recover $34,814.04, being the unrefunded balance of the overpayment of $77,338.94 for 1919 allowed by the Commissioner of Internal Bevenue on his schedule of refunds signed May 15, 1924. The amount sued for was credited by the Commissioner against an additional assessment for 1917 at a time when the 1917 tax was barred by the statute of limitation. A certificate of overassessment was duly prepared by the Commissioner and delivered to the taxpayer showing his allowance of the overpayment of $77,-338.94 for 1919 and the division thereof to the amount refunded and the amount credited. After the receipt of the certificate of overassessment and the Treasury cheók for the portion of the 1919 overpayment in excess of the amount credited against the 1917 tax, Wentz died and the executors' of his estate made demand upon the Commissioner for payment of the balance of the 1919 overpayment. The Commissioner in his letter to the executors agreed that the 19TT tax was barred at the time the credit was made but refused to refund the balance of the 1919 overpayment on the ground that the statute of limitation of six years had barred a suit to recover the same. This conclusion of the Commissioner was based on the view that the cause of action for the overpayment for 1919 accrued on May 15,1924.

Counsel for the defendant contend that plaintiffs’ cause of' action to recover the unrefunded portion of the 1919 overpayment, amounting to $34,814.04, credited against the barred 1917 tax accrued May 15, 1924, the date on which the Commissioner signed the schedule of refunds and credits; allowing the overpayment of $77,338.94, and that this suit was barred by the statute of limitation of six years at the time it was instituted on June 10,1930; second, that plaintiffs are not entitled to recover because (a) the petition was not filed within five years after the pajunent of the tax for 1919,. nor within two years after the Commissioner allowed the overpayment, and (b) that the action of the Commissioner-in allowing the 19Í9 overpayment crediting a portion thereof against the 1917 tax, the refunding of the balance, and the issuance and. delivery of the certificate of overassessment showing the details thereof, did not give rise to a cause of action, that plaintiffs had “ no cause of action in the nature of an account stated ”, and that the six-year statute of limitation has no application.

It is also contended by the defendant that no interest on the unrefunded portion of the 1919 overpayment of $34,-814.04 can be recovered because the cause of action therefor-accrued May 15, 1924.

The majority opinion holds that the Commissioner’s determination and allowance of the overpayment of $77,338.94 for 1919, the issuance and delivery of the certificate of over-assessment, and his refusal to refund $34,814.04 of the overpayment when there was no tax legally collectible for any other taxable year did not give rise to an implied promise to pay the overpayment allowed, and that no canse of action with a new term of limitation arose upon the delivery of the certificate of overassessment; that inasmuch as the suit was not instituted within five years after the 1919 tax was paid, nor within two years after the date of the Commissioner’s allowance of the overpayment, it is barred by the statute of limitation.

With these conclusions I cannot agree. I can see no difference in principle between this case and the case of Bonwit Teller & Co. v. United States, 283 U.S. 258, and I am of opinion that this suit was timely instituted and that plaintiffs are entitled to recover the balance of $34,814.04 of the overpayment allowed for 1919 which was credited against a barred 1917 tax. The dissents in this court in Bonwit Teller Co. v. United States, 69 C.Cls. 638, were based on the view that the allowance of the overpayment of $10,866.43 was not barred at the time it was made because the taxpayer had filed a sufficient claim for refund and that it was entitled to recover because “ the allowance of the refund by the Commissioner is equivalent to an account stated between private parties, which is good until impeached for fraud or mistake.” In the Supreme Court the Government contended that no claim for refund had been filed, and that the refund of the overpayment was barred at the time it was allowed by the Commissioner; that even if the allowance was timely the suit in this court was barred because it was not instituted within five years after the tax was paid nor within two years after the allowance of the overpayment. The Supreme Court, after holding that Bonwit Teller & Company had filed a sufficient claim for refund of $10,866.43, said: “ * * * The Commissioner allowed the claim and on March 8 approved and scheduled to the collector the certificate of over assessment * * *. The collector credited $9,846.06 against the additional tax assessed for the year ending January 31, 1917. May 12, 1927, the Commissioner caused the certificate, showing the deduction made by the collector, to be delivered to plaintiff with a check for the balance of the overassessment and interest, $1,462.99. Plaintiff objected to the application of any part of the refund against such additional assessment on the ground that the 1917 tax was barred, and declined to accept the check in full settlement but offered to apply it in partial payment of the claim.” Upon these facts the Court said that ’’the action * * * is grounded upon the determination evidenced 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. United States v. Kaufman, 96 U.S. 567, 570; United States v. Savings Bank, 104 U.S. 728; Bank of Greencastle’s, 15 C.Cls. 25. There is no merit in the contention that the suit is barred.”

In Daube v. United States, 289 U.S. 367, the court, after referring to the Bonwit Teller & Company case and the fact that in it a certificate of overassessment had been issued and delivered, said “ the statement of an account .gives rise to a new cause of action with a new term of limitation.” The decision of this court dismissing the petition in the Daube case was affirmed by the Supreme Court on the ground that no certificate of overassessment was delivered to the taxpayer. I do not think the decision of the Supreme Court in the Daube case approves everything that was said by this court in that case.

We have held that when the Commissioner signs a schedule of refunds and credits he allows an overpayment and when there is an entry thereon showing a tax due for another year, a credit is simultaneously made. Pottstown Iron Co. v. United States, 69 C.Cls. 427, 40 Fed. (2d) 142. But the allowance of the overpayment must occur before the credit can be effective. The certificate of overassessment, which follows the approval of the schedule allowing the overpayment, states the account for the particular taxable year by showing the total amount of the overpayment allowed and division thereof to the amount credited and the amount refunded; therefore, if the amount satisfied by an offset or credit of a portion of the overpayment is not legally due the Government, or is barred by the statute of limitation, the taxpayer is entitled to recover the balance of the overpayment allowed and shown on the certificate of overassessment. Each taxable year stands alone, Burnet v. Sanford & Brooks Co., 282 U.S. 359, and the allowance of an overpayment and. the delivery of a certificate of overassessment for a particular taxable year is a statement of the account for such year, and if there is no' tax legally due the Government for another-taxable year, the statute raises an implied promise to pay the overpayment allowed by the Commissioner and stated in the certificate of overassessment. In these circumstances-I cannot agree with the statement that “We are at a loss to-understand how it can be argued from this state of facts that the Government agreed that $34,814.04 more was due the taxpayer.” The Commissioner of Internal Revenue is not required to agree independently of his official allowance - of the overpayment and the issuance of a certificate of over-assessment as to the amount due the taxpayer. Finding IY, therefore, I think answers finding YI. The very fact that he,. as the responsible officer, officially makes the allowance of the overpayment for the particular taxable year and delivers to the taxpayer the certificate of overassessment showing the overpayment due the taxpayer for such taxable year gives rise to an implied promise to pay the overpayment if there is. no tax for another taxable year that can be legally collected, and such statement of the account for the taxable year involved “ gives rise to a new cause of action with a new term of limitation.” There is no appeal from the Commissioner’s - allowance of an overpayment and the statute of limitation which requires a suit to be instituted within two years after the disallowance of a claim for refund in the case of rejected claims, or within five years after the tax was paid, does not apply.

The statute of limitation is jurisdictional in this court. In Naumkeag Steam Cotton Co. v. United States, 76 C.Cls. 687, this court recognized that a suit instituted within six years after the delivery of the certificate of overassessment to recover a portion of an overpayment allowed and credited against a barred tax for another year was timely but dismissed the petition on the ground of estoppel.

The next contention of the defendant, which' is not discussed in the majority opinion, is that plaintiffs’ cause of action for interest on the unrefunded portion of the 1919-overpayment accrued when, the Commissioner signed the schedule of refunds and credits May 15, 1924, and was, therefore, barred at the time the petition was filed on June 10, 1930. We held in Bonwit Teller & Co. v. United States, 72 C.Cls. 559, 52 Fed. (2d) 904, certiorari denied 285 U.S. 538, a case in all respects similar to the present, that where an overpayment was timely allowed and illegally credited interest continued to run under the statute when a suit was brought to recover the balance of the overpayment and that the taxpayer was entitled to recover interest on the overpayment allowed and unpaid from the date of payment of tax to a date not more than thirty days preceding the date of the refund check in accordance with section 177 (b) of the Judicial Code as amended by section 615 of the Revenue Act of 1928. Plaintiffs are, therefore, entitled to recover the interest claimed.

I am of opinion that judgment should be entered in favor of plaintiffs for $34,814.04 with interest at six percent per annum on $12,141.05 from September 15, 1920, and on $22,-672.99 from June 14, 1920, to such date as the Commissioner of Internal Revenue may determine in accordance with the-provisions of section 177 (b) of the Judicial Code as-amended by section 615 of the Revenue Act of 1928.

SUPPLEMENTAL OPINION OF THE COURT, ON PLAINTIFFS’ MOTION FOR NEW TRIAL

Green, Judge,

delivered the opinion of the court:

In the argument for new trial it is contended that this-case is identical with the case of Bonwit Teller & Co. v. United States, 283 U.S. 258, in which judgment was rendered for the plaintiff. We have undertaken to show both, in the case of David Daube v. United States, 75 C.Cls. 633, affirmed 289 U.S. 367, and in the opinion originally filed in the case at bar that the decision in the Bonuiit Teller case was based upon the assumption not disputed in the briefs-of counsel that there was in fact an account stated in favor of the plaintiff. But aside from this, there is an important difference between the case now before the court and the Bonwit Teller case, supra. This difference is found in finding VI which recites:

“ 6. There is nothing in the evidence that shows or tends to show that there was at any time any agreement or promise, express or implied, on the part of the defendant through its officials to refund or pay to the taxpayer the sum for which suit is brought, or any other sum beyond the amount to be refunded as specified in the certificate of overassessment for the year 1919, which showed a credit of a portion of the overassessment against the taxes of 1917 as set forth above.”

This statement is criticized as being a negative finding, but negative findings are often made by this court as a matter of necessity and are absolutely required where there is any question as to whether or not there is evidence on certain points which are vital to the case. There is not and cannot be any objection to this finding on the ground that it does not correctly show the condition of the evidence.

There was no such finding made in the Bonwit Teller case, supra.

This finding is determinative of the case, but in order that all that appeared from the evidence may be shown by the findings we have concluded to add thereto the words, “ nor was there anything in the evidence that tended to show an admission on the part of the taxpayer of the correctness of the balance struck by the account.”

In the original opinion herein, we referred to the case of David Daube v. United States, supra, and the opinion of the Supreme Court affirming the decision therein. In the Daube ease, supra, the majority opinion referred to the rule that in order to constitute an account stated the parties must agree upon the balance struck and there must be a promise, express or implied, for the payment of the balance, and further that “ the j)arties cannot state an account by agreeing to part of the items, and leaving the others open for future adjustment or litigation.” This principle has been supported by a uniform line of authorities for more than a hundred years and no court has ever deviated therefrom when the question came before it for determination. In 1 C. J., sec. 263, p. 685, more than fifty cases are cited in note 34 as following the rule. Also in 1 C. J., sec. 265, p. 686, it is said that—

“ In. order to create an account stated, the debtor must not only assent to the correctness of the account but also admit his liability therefor.” Citing numerous cases among which is Columbia River Packing Co. v. Tallant, 133 Fed. 990, wherein it is said that an action upon an account stated is an action upon the promise to pay.

Hundreds of cases could be cited where the question was whether the minds of the parties met upon the correctness of the account stated. It is also to be noted that, to put it as stated in the .original opinion in the case at bar, in the case of David Daube, supra, the Supreme Court said that the evidence must be such that it sustains the inference of an agreement that the tax shall be repaid.” Finding VI negatives such a conclusion.

Nevertheless, it seems to be contended now that in the case of Toland v. Sprague, 12 Pet. 300, 333, cited by the Supreme Court in the Daube case, it was held that the nature of an account stated is not changed by there being a controversy as to the balance due thereon. We are clearly .of the opinion that such was not the holding with reference to the account itself and that so far from sustaining the contention made on behalf of defendant the case by implication sustains the rule we have above stated. The action in the case last cited was upon an account for merchandise as to which the court said in the opinion, “ neither party asks to open the account, and both admit the same balance.” The defendant in the case refused to pay this balance by reason of a claim set up by him on matters having no connection with the account. The account and the balance having been agreed to, the court properly held that this constituted an account stated.

We think it is obvious that if the rule contended for was adopted the consequences would overturn a number of other well-settled principles of commercial law. Under such a rule a creditor could not send out an account containing items of debit and credit without fixing his liability for the items of credit contained in the account and giving the debtor an extension of the period of limitations to sue thereon. So also if no assent is necessary, the mere sending out of a statement of an account on the part of the creditor would bind the debtor and extend the time of limitations for bringing suit thereon.

We see no reason for further argument, and the motion for leave to argue the motion for new trial orally is therefore overruled. The motion for new trial is also overruled.

Whalet, Judge; Williams, Judge; and Booth, Chief Justice, concur.

Littleton, Judge,

dissenting:

If, as the Supreme Court held in the Bowwit Teller case, the provisions requiring the filing of claims for refund for taxes alleged to have been erroneously or illegally collected do not apply to overpayments of taxes allowed after the allowance is made and a certificate of overassessment is issued and delivered, and the statute of limitation requiring that suits to recover taxes alleged to have been erroneously or illegally collected must be instituted within two years has no application to a suit to recover an overpayment allowed, what limitation except the statute of six years after the cause of action accrued can apply?

The Commissioner’s allowance of an overpayment for a particular year is an award in favor of the taxpayer; and this is true notwithstanding an attempted credit is made. There is no appeal from his decision and it is not subject to review by any other administrative officer. A suit to recover the whole or a part of an overpayment allowed by the Commissioner is not, as pointed out by the court in the Bonwit Teller case, a suit to recover a tax alleged to have been erroneously or illegally collected but is a suit to recover the amount of an allowed claim. If the whole or a portion of an overpayment allowed for which a certificate of overassessment is issued is offset against an alleged indebtedness of a taxpayer to the Government or payment is withheld for any reason, is the taxpayer, after such allowance and issuance of a certificate of overassessment, required to file another claim for refund under section 3228 of the Revised Statutes? The provisions requiring the filing of a claim for refund do not seem to me to apply to cases where the overpayment has already been allowed. Moreover, the Commissioner could postpone action upon a claim duly filed under section 3228, Revised Statutes, for a tax alleged to-have been erroneously or illegally collected until the expiration of four years after such, tax was paid and then allow it, refuse to make the refund, and, if the provisions of such section are applicable and require such claims, no valid claim could be filed within four years after payment, and, in such a case, no suit could be brought within five years after payment. Where a claim for refund is filed in accordance with the statute prior to any allowance by the Commissioner, the Commissioner usually makes his decision thereon more than four years after the tax was paid and in many cases more than five years thereafter.

A. taxpayer might in some case perchance file a second claim for refund for the overpayment allowed by the Commissioner after such allowance and issuance of a certificate of overassessment and institute suit within six months after the filing of such second claim or within two years after the refusal of the Commissioner to pay such overpayment allowed, but I do not construe the provisions of section 3228 of the Revised Statutes or the provisions of section 3226 of the Revised Statutes as amended to require that this be done.

I am still of the opinion, therefore, that where the Commissioner allows an overpayment and issues and delivers a certificate of overassessment there is a statement of the account for that year, and that a suit instituted within six years to recover the whole or any portion of such allowance, if payment thereof is refused for any reason, is timely. The offset or credit of a portion of the overpayment in favor of plaintiff for 1919 as disclosed by the certificate of over assessment did not prevent the account for 1919 from being a stated account. Toland v. Sprague, 12 Pet. 300, 335. In this case the credit or offset was void and of no effect by express provision of the statute, otherwise the plaintiff would have had four or five years within which to file a claim for refund and two years after disallowance to bring suit for the erroneous credit as an erroneous and illegal collection for 1917. Compare Swift & Co. v. United States, 282 U.S. 468. But in a case like the present one, no suit could be maintained to recover the amount credited as a collection for it was void, Parks & Woolson Machine Co. v. United States, 75 C.Cls. 204, and the statute commanded the Commissioner to pay the claimed overpayment to the taxpayer. The Commissioner’s allowance, I think, gave rise to an implied promise to pay and gave plaintiffs a cause of action upon the certificate of allowance which was accepted by the taxpayer, which stated a balance of $77,338.94 in favor of the taxpayer in the tax account for 1919, only $42,524.90 of which was paid. The fact that the Government claimed the right to retain $34,814.04 of the overpayment disclosed in the certificate delivered to the plaintiffs, and to apply it against an alleged indebtedness of the taxpayer on another account for a different taxable year, does not, it seems to me, change the situation. The Government and the taxpayer admitted the correctness of the overpayment due plaintiffs for 1919, as stated in the Commissioner’s certificate, but the Commissioner said in effect: I will give you a check for only a portion of the amount which I have allowed, and which the Government owes you for 1919, and will pay you the balance by crediting-it to your account for 1917 — but there was nothing due the Government for 1917 which could be collected and the attempted credit has since been declared void by the statute.

In Daube v. United States, 289 U.S. 367, 369, 370, in which the Commissioner did not issue a certificate of overassessment or otherwise notify the taxpayer of the overpayment for 1919, the court distinguished the Bonwit Teller case and said: “The collector did what the Commissioner commanded. No notice, however, of his action was transmitted to the taxpayer. There was no delivery to the taxpayer of a certificate of overassessment. There was no delivery of a copy of any schedule of refunds and credits. * * * The Commissioner did not inform the taxpayer that the tax [for 1919] had been overpaid in a determinate amount. The taxpayer did not give assent, either expressly or by silence, to the outcome of the audit. The essentials of an account stated in any strict or proper sense are lacking altogether. Toland v. Sprague, 12 Pet. 300, 333; Nutt v. United States, 125 U.S. 650, 655; Volkening v. DeGraaf, supra (81 N.Y. 268, 271); Newburger-Morris Co. v. Talcott, 219 N.Y. 505, 511, 512; 114 N.E. 846. A different situation was disclosed in the Bonwit Teller case, supra. There the certificate of over-assessment had been delivered to the taxpayer. * * * ”

In Toland v. Sprague, supra, cited with approval by the court, it was pointed out that the nature of an account stated is not changed by there being a controversy as to a balance stated. In that case it appeared that the defendant who had sold certain merchandise for plaintiff’s account sent plaintiff' a statement of the sales amounting, in net proceeds, to $2,519.13, and showing that amount to be due plaintiff on account of such sales. This amount, however, was not paid to plaintiff but was withheld by the defendant on the ground that he was entitled to retain the amount to satisfy amounts due him by plaintiff for advances made to plaintiff’s agent in their dealings for plaintiff’s account. The question before the Circuit Court and the Supreme Court was whether, under the circumstances, ¡there was an account stated between Toland and Sprague. The court held that there was, and said: “ We agree in opinion with the circuit court that there was a matter of controversy brought to a single point between them; that is, which of them had, by law, a right to a sum of money, ascertained by consent to amount to $1,579.” The court further pointed out that “ the nature of the aeeount is not changed by there being a controversy as to a balance stated, which the defendant does not ash to- diminish, or the plaintiff to increase; * * *. As the circuit court say, the question between them is not about the account, or any item in it; but as to the right of the defendant to-retain the admitted' balance, to repay the advances made to Pettit.” (Italics supplied.) So in this case, the only controversy was and is whether the defendant had the right to. retain a portion of the overpayment allowed for 1919, of which plaintiff was advised, and to apply it on the 1917 tax account. In the Toland case the statute of limitation started to run when the account was stated and the suit was-held to be barred, whereas if there had been no account stated this suit would have been in time, as contended by the plaintiff.

In Wm. J. Friday Co., Inc. v. United States, 61 Fed. (2d) 370, 374, the Circuit Court of Appeals for the Third Circuit applied the rule laid down in the Bonwil Teller case and held that the taxpayer was entitled to maintain a suit instituted within six years to recover a portion of an overpayment allowed for one year and credited against a barred tax for another year. The Wm. J. Friday & Company case was cited by the Supreme Court in connection with its statement in the Dcmbe case, as follows: “A different situation was disclosed in the Bonwit Teller case, supra. There the certificate of overassessment had been delivered to the taxpayer. 'Upon delivery of the certificate to plaintiff, there •arose the cause of action on which this suit was brought.’ Bonwit Teller & Co. v. United States, supra, p. 265. Cf. W. J. Friday & Co., Inc. v. United States, 61 F. (2d) 370.”

There was an agreement in the case at bar that the overpayment for 1919 would be repaid, either in cash or by a lawful credit. It was not repaid in cash and the credit was unlawful. The contest as to the validity of the credit does not affect the statement of the account for 1919.  