
    JOHN H. SIMONS v. THE UNITED STATES.
    [No. 14027.
    Decided May 26, 1884.]
    
      On the Facts.
    
    In 1862 the direct-tax commissioners for South Carolina impose a tax on all real property within the State. In 1865, after the capture of Charleston, they exact interest upon the tax, tlie property being a house in that city. The owner pays it without protest, and receives a receipt authorizing him to collect his rent. At the time the owners of houses are not allowed by the military authorities to acquire possession until their direct taxes are paid.
    I.The direct-tax commissioners were not authorized by the Aottth June, 1862 (12 Stat. L., p. 422, § 6, eh. 98), to impose or collect taxes on real property across the military lines. Intercourse was forbidden both by statute and international law.
    II.Interest on a direct tax exacted for a period anterior to a legal assessment was money collected from the oWner of the property “ without warrant of lato,” within the meaning of the Revised Statutes, § 3689.
    III. Payment of an illegal tax upon real property, made to acquire possession, is an involuntary payment, which may be recovered back.
    IV. The policy of the government, as declared by the Revised Statutes, § 3689, is that moneys collected under the direct-tax laws, but without warrant of law, shall be refunded, and the refunding shall not be dependent upon annual appropriation acts.
    V.A person entitled to a refund of money collected as a direct tax without warrant of law can allow it to remain in the Treasury for an indefinite period without losing his right to demand and receive it, and the statute of limitations does not begin to run against such a claim till a demand be made.
    VI.No legislative intent can be inferred from the annual appropriation acts to renovate a claim, or class of claims, barred by the statute of' limitations; but if money be appropriated to pay a designated claim, or class of claims, already barred by the statute, the legislative intent is to give a new promise founded upon the old consideration
    
      YII. If Congress give legal efficacy to a designated claim, or class of claims, -which were not legal rights, or mere rights without remedy, the statute of limitations begins to run from the passage of the enabling act, or from the happening of some event prescribed therein.
    
      The Reporters’ statement of the case :
    This case was transmitted by the Secretary of the Treasury under the Revised Statutes, section 1063, the claimant stipulating that the transmission should not waive the statute of limitations. The following are the facts found by the court so far as they relate to the decision of the case:
    I. On the 3d November, 1862, at Beaufort, S. G.,the tax commissioners for the collection of United States direct taxes in •South Carolina adopted the following resolution:
    
      u Resolved, That inasmuch as the records of the last assessment and valuations of the lands and lots of ground made under the authority of the State of South Carolina, previous to the first day of January, A. D. 1861, are' so concealed as not to come within the possession of the commissioners, therefore, upon the evidence taken, and which has come before us, the .said commissioners, the said assessment and valuation of the whole real estate in said State we find to be, and do fix and establish the same at, the sum of thirty millions eight hundred and thirty-three thousand three hundred and twenty-two dollars ten cents and four mills ($30,833,322.10-140-).
    
      “ Resolved further, That there be assessed upon the lands of the said State the sum of two dollars ad valorem for each one hundred dollars’ valuation, and that there be assessed upon the •city, town, village, and borough lots the sum of eighty cents ad valorem on each one hundred dollars of valuation.”
    II. The above assessment and valuation was founded upon printed lists of valuations made by the State authorities for the year 1860.
    III. The city of Charleston was occupied February 17,1865, and on March 6 the commissioners “ fixed the amount of the tax” by the following resolves:
    
      “ 1st. Resolved, That the valuations of the printed tax list of the city of Charleston for 1860 be adopted as the basis of valuations for assessing the lots of the said city, and that the farming, gardening, or planting lands of St. Phillip’s and St. Michael’s be assessed as by the State valuations.
    “ 2d. Resolved, That the house No. 26 Pitt street be taken for the present as the office of this commission.
    
      “ It was also Ordered, That notices of readiness to receive the taxes of St. Phillip’s and St. Michael’s be put up at the gate of this office, under the porch of St. Michael’s church, and at the post-office.”
    And the following notice was so posted:
    “Tax Notice.
    
      11 The undersigned, U. S. direct-tax commissioners for South Carolina, having completed the assessment on lots and lands in St. Phillip’s and St. Michael’s parishes, S. 0., are now prepared to receive the taxes on the same at their office, No. 26 Pitt street, Charleston, So. Ca., between the hours of 10 a. m. and 3 p. m. each day, Sundays excepted, for sixty days from this date.
    “ Charleston, So. C., March 6th, 1865.
    “ Wm. Henry Brisbane.
    
      “ W. E. Wording.
    “D. N. Cooley.”
    IY. During sixty days after the 3d November, 1862, no effort was made by claimant, either in person or by an agent, to pay to the commissioners or into the Treasury of the United States the direct taxes charged on lot No. 6,, Lynch street, Charleston, S. C., valued at $18,000, but on the 6th day of May, 1865, the money was paid to the commissioners by one WilliamLucas, and in addition thereto $40.80, being interest on the same at the rate of 10 per centum per annum from July 1,1862, the date of the President’s proclamation. Claimant subsequently ratified this act by refunding the money to Lucas. The money was paid to the tax commissioners without objection or protest, and before any effort had been made to sell the property. It was not until August 23,1882, when claim was made for refund of the interest, that claimant intimated in any way that payment of any part of the $184.80 was involuntary or illegal.
    Y. The claim thus presented to the Secretary of the Treasury has by him been transmitted to this court, it being agreed by the claimant that the reference shall not be treated as any waiver of the statute of limitations. '
    YI. At the time when the claimant’s tax was'paid all unoc-' ■eupied houses in Charleston, including that of the claimant, had been regarded as abandoned by the officers of the government, and the owners thereof were not allowed to acquire possession until their direct taxes thereon were paid. At the time of payment, as set forth in finding IY, the commissioners indorsed on the receipt to claimant for this tax as follows:
    “ The direct taxes on within-named property having been paid, the owner or agent is hereby authorized to collect the rents.”
    
      Mr. William M. Marie for the claimant:
    The action of the tax commissioners in requiring interest in these cases was simply an addition of a penalty not provided by law. That provided by the statute was specifically attached as such for a failure to pay before the land was advertised, after the tax was lawfully fixed; but this one of theirs was upon a purely arbitrary basis. It superadded a penalty under the name of “interest,” computed for years before any tax was fixed, before the party had an opportunity to pay, or could be in default ; before the Commissioners could fix the tax, much less advertise that they were ready to receive it, or advertise the land for sale.
    Penal statutes are to be strictly construed. Such is the reasonable and humane policy of the law. They must be complete, and therefore nothing can be inferred in their aid — nothing can be taken by intendment. Penalties and forfeitures are subject to the same rules in this regard.
    Upon the letter of the statute and the construction of the Supreme Court, no penalty nor any interest attached until a sale was made, and when a sale was made the 50 per cent, penalty and the 10 per cent, interest required by law was to be deducted. It is immaterial to the issue now before the court, if I am correct in this proposition, as to the time from which this interest should have been calculated, because in these cases there was no sale made. The parties paid their money directly to the commissioners, and the interest was then exacted from them. Nor was the land advertised even for sale. And it does seem clearly to appear that no interest was to be required; certainly not unless the land was advertised, and if so, then interest must have been intended to begin from that time.
    The spirit, scope, and purpose of these direct-tax laws was wholly miscouceived by some of the commissioners and many other executive officers. “The collection of direct taxes” was totally distinct from “ confiscation.”
    The spirit of the laws, just as much as their language, has been construed by the courts. There is no point or feature of this legislation which better illustrates its true spirit than the-provision of section 36, as to “ the surplus proceeds of sale,” and the one which we are now considering, the fourth section of the act of February 25, 1869, enacted after the wort was all done, and which provided, without limitation, for the correction of all errors by requiring that the Secretary of the Treasury shall refund money “received of them without warrant of law, as in payment of dues under the direct-tax laws,” whenever “ satisfactory evidence of the illegal collection” is presented to them.
    I do not propose to try by equitable considerations to argue away the force of a “statute of repose.” In view of the plain •decisions of the Supreme Court, I am not reduced to any such strait. “ Every statute for the continuance of which no time is limited is perpetual although it be not expressly declared to be so.” (Bwarris, p. 150.)
    This is a remedial statute, and as such to be liberally construed ; and I stand upon the broad ground that this provision •of the statute recognized the probability that “ money had been received without warrant of law, as in payment of dues under the direct-tax laws,” and meant to give a perpetual remedy therefor and treated it in analogy to a trust.
    In support of this view we have a further declaration of the legislative will, in the fact that Congress has incorporated into the Revised Statutes an express provision making a permanent annual appropriation for the payment of this precise class of •claims. (R. S., § 3689.)
    
      Mr. John 8. Blair (with whom was the Assistant Attorney-•General) for the defendants :
    The penalty was inflicted for non-payment. If the owner failed or refused to pay, and sale became necessary, the penalty, together with interest, was required either from the land or from the redeemer; but if the payment was voluntary and before sale, no penalty was demanded. The only difference advertisement could make to a tax-payer would be that if it was •delayed until after payment he would be spared the cost of advertising; but after sixty days, to save his property from sale, he must pay 10 per centum.
    
      Both by reason and analogy, interest should run from the date of the President’s proclamation. 3sTo good ground can be shown why the date should differ from that fixed for one who sought to. redeem. And the time when the tax was charged upon the property was the time when it became due. It is true he might not be able to pay it then, nor until the commissioners had fixed it; but when it was fixed he was granted the privilege of saving all interest by prompt payment. Each owner of laud resident in the insurrectionary States is deemed engaged in the insurrection (Mrs. Alexander’s Case, 2 Wall., 404), and responsible for the delay in fixing the tax. In default of any evidence-as to his residence the court must assume that claimant belonged in South Carolina.
    If, then, responsible with others for the lapse of time after the proclamation until the fixing of the tax, he cannot urge his own wrong as an excuse for delay in payment.
    It is a well-established principle that money paid under a mutual mistake of law cannot be recovered. It cannot be said that in this case there was any compulsion, and it must bo conceded that at the time the money was paid, as well as when the act was ratified, claimant did not believe it to be unlawful.
    As in the case of Lamborn v. 1’he Commissioners (97 U. S., 181), the claimant might have paid or tendered the amount conceded to be due, refused payment of interest, and tested the legality of the sale in an action of ejectment. (See also Railroad Company v. Commissioners, 98 U. S., 541.)
    • Thepermanent appropriation, section 3689, confers and creates, no right, but simply provides a fund for payment to those who, outside of the appropriation, can show a right-.
    It is undoubted that the cause of action arose May 11, 1865 it was therefore barred May 11, 1871, by section 1069, Revised Statutes.
    Continuing statutes of appropriation may have permitted the Secretary of the Treasury to pay at any time; but, unlike the case of Taylor (104 U. S.), the remedy of claimant was not dormant until demand made.
   Nott, J.,

delivered the opinion of the court:

In 1862 the United States direct-tax commissioners for the State of South Carolina passed a resolution imposing a tax on all real property within the State. In 1865 they charged and. received from the claimant interest on the tax for a period running from the President’s proclamation pf July 1, 1862, to the time of payment.

When the tax commissioners fixed the assessment of taxes in the State by their resolution of November 3,1862, they were in Beaufort, on one side of the military lines, and the claimant was, it may be assumed, in Charleston, on the other. At that time the tax commissioners and the party taxed were enemies of each other, and all business intercourse between them was forbidden both by international and statute law. It would have been unlawful for the owner in Charleston to have paid taxes across the lines, and it would have been unlawful for the commissioners to have received'them.

The Act 7th June, 1862 (12 Stat. L., p. 122, § 6, ch. 98), provided—

“ That the said board of tax commissioners shall enter upon the discharge of the duties of their office whenever the commanding general of the forces of the United States, entering into any such insurrectionary State or district, shall have established the military authority of the United States throughout any parish or district or county of the same.”

The statute therein harmonized with the law which regu lated commercial intercourse, and renders it manifest, we think, that the direct taxes could not have been fixed upon property in Charleston until the owners could have lawfully paid them and the commissioners lawfully received them. Charleston was'occupied by the forces of the government on the 17th February, 1865, and the commissioners again “fixed the amount of the tax” on property in Charleston by .their resolution of March 6. In the opinion of the court that was the first time that the amount of the tax was fixed within the true intent of the statute, the previous resolution of November 3d being operative certainly no further than the military lines extended. Hence the penalty of 10 per cent, interest exacted of the claimant from July 1,1862, was unauthorized by law.

The tax was paid without protest or objection, and the counsel for the government contends that it was a voluntary payment made in mistake of law which cannot be recovered back.

It is conceded that as to personal property the payment of an illegal tax is not deemed voluntary though made without protest, but it is said that as to real property, where the owner can always bring his action of ejectment, the rule is different. Without stopping to inquire whether the rule generally is different, we are of the opinion that the principle applicable to cases like this is the same. Where a man is obliged to pay an illegal tax to obtain possession of his property, whether it be' personal or whether it be real, the payment is involuntary.

This case indeed seems to the court analogous in every part to the proclamation cases, De Bow, &c. (11 C. Cls. R., 672; affirmed 13 id., 562), where this question of voluntary or involuntary payment was considered. There the officers of the government had acquired possession of the claimant’s property (his cotton) lawfully. In the belief that they had a statutory right to charge him a license fee for bringing it into New Orleans they required him to pa.y one, and he paid without objection, but to obtain possession of his property. Here the officers of the government likewise had acquired possession of the claimant’s property (his house) lawfully; ■ and, in .the belief that .they had a right' to charge him the 10 per cent, interest, they required him to pay it, and he paid without objection, but to obtain possession of his property. In the words of Baron Mam tin in Steele v. Williams (20 Eng. L. & Eq. R., 319), “ to call such a payment a voluntary payment is an abuse of language.”

This case was transmitted to the court by the Secretary of the Treasury upon condition, and accompanied by a stipulation on the part of the claimant to the effect that the statute of limitations be not waived by the transmission. We proceed therefore to inquire whether the case is barred by the statute.

Three things are to be observed concerning the case: (1) The Act 7th June, 1862, under which this tax was levied, was “An act for the collection of direct taxes in insurrectionary districts within the United States.” (2) The Revised Statutes provide:

“ § 3689. There are appropriated, out of any moneys in the Treasury not otherwise appropriated, for the purposes hereinafter specified, such sums as may be necessary for the same respectively; and such appropriations shall be deemed permanent annual appropriations.
*******
“To refund to persons money collected from them without warrant of law, as in payment of dues under the direct-tax laws.”

(3 ) The exaction of 10 per cent, interest in May, 1865, on a tax imposed upon real property in Charleston was money collected “ without warrant of law.”

The claim, therefore, is one for which the law provides a permanent appropriation, and concerning which the Revised Statutes in effect declare the policy of the /government to be that moneys collected by its agents under the direct-tax laws which are not really taxes, that is to say, which were “ collected without warrant of law,” shall always be refunded, and the refunding shall not be dependent upon annual appropriation acts. Thus far the policy of the government is clear, an”d the intent of Congress unquestionable.

The Joint Resolution 25th February, 1867 (14 Stat. L., 568, sec. 4), more explicitly provided:

“That the Secretary of the Treasury shall be ■ authorized -to refund to persons from whom money has been received without warrant of law, as in payment of dues under the direct-tax laws, the sums so illegally collected; such refunding to be ordered on the presentation, in each case, of satisfactory evidence of the illegal collection.”

It is not altogether clear that the application for a refund must first be made to the Secretary of the Treasury before suit can be brought; but it is clear, as was said by Mr. Justice Woods, in Mrs. Irene Taylor's Case (104 U. S. R., 216), of a section of another statute—

“ This section limits no time within which application must be made to the Treasury for the proceeds of the sale. The Secretary was not authorized to fix such a limit. Whenever the owner of the lands, or his legal representatives, should apply for the money, it was the duty of the Secretary to draw his warrant therefor, without regard to the period which had elapsed since the sale. The fact that six or any other number of years had passed did not authorize him to refuse payment. The person entitled to the money could allow it to remain in the Treasury for an indefinite period of time, without losing his right to demand and receive it. It follows that if he was not required to demand it within six years, he was not required to sue for it within that time.”

And we may add, in the language of the same learned judge:

“A construction consistent with good faith on the part of the United States should be given to these statutes. It would certainly not be fair dealing for the government to say to the owner that the surplus proceeds should be held in the Treasury for an indefinite period for his use or that of his legal representatives, and then,-upon suit brqught to recover them, to plead in bar that the demand therefor had not been made within six years.”

When Congress appropriate money generally, as for the annual expenses of the government, no legislative intent can he inferred to renovate a claim or class of claims' barred by the statute of limitations. But when Congress appropriate money for the payment of a designated claim or class of claims already barred by the statute of limitations it must be inferred that the legislative intent was to give a new promise founded upon the old consideration. In such cases the statute of limitations begins to run from the enactment of the appropriation act. So when Congress give legal efficacy to a .designated claim or class of claims which were not legal rights, or which were rights without a remedy, it must be intended that the newly created claims should accrue from the passage of the enabling act or from the happening of some event prescribed therein. The cases of Hukill (16 C. Cls. R., 562) and Mrs. Taylor (14 id., 339) illustrate what is here meant. Now, in the direct-tax cases like the one at bar the claimants were without right or remedy till the joint resolution 1867 came to give them both. Manifestly, therefore,' claims which were virtually created by a joint resolution did not accrue at the previous time when the money was collected without warrant of law.

When, then, did they accure? The joint resolution named no time, but provided for the happening of an event, viz, their presentation to the Secretary of the Treasury, and upon the happening of that event each claim accrued. The joint resolution was merged in the Bevised Statutes, but it cannot be said that the statute of limitations should then begin to run, for manifestly there was no intent to change the usage or impair the rights of parties. We must therefore fall back upon the-words of the Supreme Court concerning a surplus iu the Treasury derived from tax sales and say:

“The person entitled to the money could allow it to remain, in the Treasury for an indefinite period without losing his right to demand and receive it. It follows that if he was not required to demand it within six years he was not required to. sue for it within that time.”

The judgment of the court is that the claimants recover of the defendants the sum of $40.80.  