
    EDISON ELECTRIC ILLUMINATING COMPANY v. THE UNITED STATES.
    [No. 22496.
    Decided January 19, 1903.]
    
      On the Proofs.
    
    The Commissioner of Internal Bevenue allows a ref und of internal-revenue ' taxes assessed under the act 13th June, 1898. The accounting officers disallow the entire amount. The claimant brings his action on the award. The defendants contend that the decisions of the Supreme Court in United States v. ICanfman (96 U. S., 567) and United States v. Savings Bank (104 id., 728) have been modified by the decision in Medbury v. United States (173 id., 492), and that the Commissioner’s award is conclusive only as to the facts found by him.
    I.Under the decisions of the Supreme Court in the cases of United States v. Kaufman (96 U. S., 567) and United States v. Savings.Bank (104 id., 728), it must be held that an allowance by the Commissioner of Internal Bevenue for the refund of a tax illegally collected is not the simple passing of an ordinary claim by an ordinary accounting officer, but an award upon which an action may be brought, and which is conclusive unless impeached for fraud or mistake.
    II.If such a claim is rejected by the Commissioner a judicial remedy is given the party by an action against the collector. If the claim is allowed by the Commissioner and payment refused by the accounting officers, a suit may be brought directly against the Government in the Court of Claims.
    III.The distinction between the before-mentioned cases and that of Medbury (173 id., 492) rests on the fact that the Act 16th June, 1880 (21 Stat. L., 287), under which the Secretary of the Interior acts, gives no judicial remedy.
    
      The Reporters' statement of the case:
    The following are tbe facts of this case as found by the court:
    I. The claimant is a corporation incorporated under the laws of the State of New York and has its principal place of business in the city and State of New York.
    II. On March 22, 1900, the Commissioner of Internal Revenue, upon the claimant’s demand for the refund of taxes improperly assessed ag'ainst and collected from it, made the following findings of fact, decision, and allowance:
    
      “This company executed a mortgage securing bonds to the value of $10,000,000. Bonds to the value of $2,000,000 only were issued thereunder and stamps to the value of $999.50 were affixed to the mortgage. It was held at the time that the mortgage should have been stamped to the value of the bonds authorized to be issued thereunder, and the additional tax of $1,000 was assessed, which, with the penalty and interest, aggregating $4,242, was paid February 17, Í899. The mortgage required stamps only on the value of the bonds issued thereunder; that is, $999.50.
    “The claim is hereby allowed. .
    “G. W. Wilson, Commissioner.
    
    “(J. T. B.)”
    III. On or about August 10, 1900, the Auditor for the Treasury Department, by the following notice of settlement, rejected the said allowance, and the claimant has not been paid the amount therein named, nor anjr part thereof:
    . “B. • KWO.
    “ Internal Revenue.
    “Treasury Department,
    “Office of the Auditor for the
    Treasury Departmeut,
    “ Washington, D. 67, August 10, 1900.
    
    “EdisoN Electric Illuminating CompaNY,
    
      “Brooklyn, New York.
    
    “Gentlemen: Your account for refundment of tax and penalty paid Februaiy 17, 1899, payable from the appropriation under section 3689, U. S. Revised Statutes, for refunding taxes illegally collected, has been settled as follows, per audit No. 31271:
    Amount claimed.r. §4, 242.00
    Difference deducted. 4,242.00
    Amount allowed. 0.00
    “Difference of $4,242.00 arising as follows:
    “As under the decision of the Comptroller of the Treasury, dated August 6, 1900, the tax and penalty were properly assessed, there is disallowed the sum of $4,242.00.
    “Respectfully,
    “ W. E. Andrews,
    “ Auditor.
    
    “By H. Y. Lenoir,
    
      “Acting Deputy Auditor.
    
    “Cop}'- of decision enclosed.”
    
      IV. The circumstances under which the Commissioner of Internal Revenue acted were these:
    On October 1, 1898, the claimant executed and delivered to the State Trust Company of New York, as trustee, the mortgage, for the purpose of securing an issue of bonds, as set forth in Exhibit A in the petition.
    At or about the time of the execution of the mortgage the claimant issued bonds, secured by the same, of the total par value.of f2,000,000, and did then affix to the said mortgage internal-revenue stamps to the amount of $999.50 and duly canceled the same. No other bonds, secured by the mortgage, were issued at any time prior to February 28, 1899. After February 28, 1899, certain other bonds, secured by the said mortgage, were issued, namely:
    On April 28, 1899. §200,000 On June 21, 1899. 200,000 On October 30, 1899. 400,000 On December 6,1899. 200, 000
    Internal-revenue stamps of the proper amount were affixed to these bonds by the claimant and were'duly cancelled.
    On January 28, 1899, the Acting Commissioner of Internal Revenue issued the following assessment against the claimant upon a certificate of the collector of internal revenue for the first district of the State of New York:
    
      Alphabetical list of persons liable to tax under the internal-revenue lairs of the United States in the first collection district of the State of New York, reported by the collector of said district for assessments, and the amount assessed against each by the Commissioner of Internal Revenue, and certified to the collector of said district for collection, for the month of December, 1898.
    
    
      
    
    
      “I hereby certify that each of the persons above reported by me is liable to the tax set opposite his or her name, respectively.
    “Frank R. Moore,
    “ Collector of Internal Revenue,
    
    “ 1st Dist., State of New York.
    
    “BrookltN, Jan. 11, 1899.
    
    “I hereby- certify that, as authorized and required by law, I have made inquiries, determinations, and assessments of the taxes specified in the foregoing list, and find to be due the amounts specified in columns ‘8, 9, and 101 of said list from the persons against whose names said amounts are respectively placed.
    “G. W. Wilson,
    
      “Acting Commissioner.
    
    “Internal-Revenue Opeice,
    “ Washington, Jem. %3, 1899. — C. A. B.
    “H. R. H.”
    On January 25, 1898, the collector directed to the claimant this notice of and demand for payment of taxes assessed:
    “17. — Revised April, 1895.
    “COPY OP ASSESSMENT.
    
      “Notice of and demand for taxes assessed.
    
    “List for month of Dec., 1898.
    “Div.-.
    “ United States Internal Revenue,
    “ Oppice op the Collector op Internal Revenue, “1st District, State op N. Y., Jem. %5th, 1899.
    
    “Edison Electric III. Co.,
    
      “Brooklyn:
    
    “You are hereby notified that a tax, under the internal-revenue laws of the United States, amounting to four thousand dollars, the same being a tax upon 8. T. mortgage, has been assessed against yon by the Commissioner of Internal Revenue and transmitted bjr him’to me' for collection. Demand is hereby made for this tax. This tax, —, due and payable on or before the 1th day of Feby., and unless paid within ten days after this notice and demand it will become my duty to collect the same with a penalty of five per centum additional, and interest at one per centum per month.
    . “ Payment may be made to me at my office. .
    “ Frank R. Moore,
    “ Collector.
    
    “Bring this notice with you.”
    
      On .February 6, 1899, the collector directed to the claimant a general demand for taxes as follows:
    “Form 21.
    “COPY OF NOTICE.
    “Oeneral demand for taxes.
    “Dec. list.
    ‘ ‘ Internal-Revenue Service ,
    “1st District of N. Y.,
    
      “Collector's Office, Feb. 6, 1899.
    
    “Edison'Electric III. Co.:
    “A tax, under - the internal-revenue laws of the United States, amounting to four thousand two hundred and forty-two dollars, being for S. Ti mortgage, has been assessed against you by the- Commissioner of Internal Revenue, and transmitted by him to me for collection. The same not having been paid within the time required by law, you became liable to pay five per centum additional upon the amount thereof, and interest at the -rate of one per centum per month from the 1 day of February, 189 — , and demand is hereby made upon you for the said tax, with the additional five per centum, and such interest as may accrue before payment. If not paid within ten days from the personal service or mailing hereof, it will become imT duty to collect the same by distraint and sale of property.
    “Payment may be'made to me at my office.
    Am’t of tax. O 0 o
    Ponaltv_ to 4^0 to o
    Total... 4,242
    “Frank R. Moore,
    
      “Collector.
    
    “Bring this notice with you.”
    On February 1Y, 1899, by order of the collector, two deputy United States marshals levied upon property of the claimant and seized and collected moneys belonging to the claimant to the amount of $-1,212. The claimant objected and protested against the levy and seizure. The sum seized was thereafter paid into the Treasury of the United States by the ■collector.
    On May 2, 1899, the claimant filed with the said collector the following affidavit and schedule:
    
      “United States Internal Revenue, claim under series 7, No. 14, for taxes improperly paid.
    “State oe New York,
    “ County of Kings, ss:
    
    
      “W. Winans Freeman, of the borough of Brooklyn, city of New York, and State and count}7' aforesaid, being duly sworn according to law, deposes and says, that he is the secretary of the Edison Electric Illuminating Company of Brooklyn, a corporation organized and existing under the laws of the State of New York, and that this petition is made by him for and in behalf of the said company; that that company is engaged in the business of generating, distributing, and selling electric light and power within the borough of Brooklyn, city of New York; that upon the 25th day of January, A. D. 1899, that company was assessed an internal-revenue tax of four thousand, dollars ($4,000) for and upon a certain mortgage bearing date 1st October, 1898, and hereinafter mentioned, and that annexed hereto marked ‘ Copy of assessment’ is a copy of the said assessment as the same was on or about 25th January, 1899, furnished to the said company by the collector of internal revenue hereinafter mentioned, and that thereafter and on or about 6th February, 1899, Frank R. Moore, esq., collector of internal revenue for 1st district of New York, delivered to the said company a certain notice with respect to the said assessment and certain penalties and interest thereon, which notice was in the form of which a copy is hereto annexed marked ‘Copy of notice;’ that thereafter and on or about the 17th day of February, 1899, the said collector, claiming under said assessment and notice, and in order to collect and by way of collection of the said assessment, penalties, and interest, did, at the city of New York, Borough of Brooklyn, distrain and by force levy upon property of the said company, to wit, certain money belonging to the said company of the amount of four thousand two hundred and forty-two dollars ($4,242), and then and there did by force collect the said moneys, which amount of four thousand two hundred and forty-two dollars ($4,242) was thereby then and there on the said 17th day of February, A. D. 1899, paid to said Frank R. Moore, esq., collector of internal revenue for the 1st district of New York; which assessment and distraint of the aforesaid tax, with penalties and interest, and each and every part thereof, were and was, as this deponent verily believes, erroneous and improper for the reasons stated in Schedule A on the third page hereof.
    “And the said company now claims that, by reason of the aforesaid erroneous assessment and distraint of the said sum of four thousand two hundred and forty-two (4,242).dollars, the said company is justly entitled to have the said sum of four thousand two hundred and forty-two (4,242) dollars refunded, and the company now asks and demands the same. And this deponent further makes oath that he has not heretofore presented anjr claim for the refunding of the above amount or any part thereof, nor has any such claim been heretofore presented by the said company or bj" anjmno on its behalf.
    “W. W. FREEMAN.
    “Sworn and subscribed before me this 2nd day of Mav, A. D. 1899.
    “Wm. H. IIaricNess,
    
      “Kotary Public, Kings Go.
    
    “Cert, filed in N. Y. Co.
    “Schedule A.
    “The ground of the said assessment was solely the supposed liability" of the said company by reason of a certain mortgage bearing date the first day of October, 1898, and on or about that date executed and delivered by the company to The, State Trust Company of New York, as trustee. A copy of the said mortgage is herewith submitted, entitled ‘ Copy of the mortgage.’ At the time of the execution of the said mortgage none of the bonds therein mentioned and to be thereby" secured had been executed or delivered, nor had anjr definite or certain sum of money or any sum of money whatever for -which the said mortgage was made as security been then lent or previously become clue or owing or forborne to be paid, being payable. The total par amount of the said bonds which it was then proposed, or which at any time prior to the said issuance it was proposed, to execute or deliver was two million dollars (<$2,000,000). Nor was it then contemplated or intended that any other sum of money should be lent or become due or ow'ing or forborne to lie paid, being payable, for which the 'said mortgage was made as security. After 1st October, 1898, and prior to 25th January, 1899, and on or about the 10th day of October, 1898, there were executed and delivered of the bonds mentioned in and to be secured by the said mortgage bonds of the par value of two million dollars (§2,000,000), and no more; and at no time heretofore have any bonds mentioned in or to be secured by the said mortgage or any obligation of any nature whatsoever mentioned in or secured by or related to the said mortgage been executed or delivered, nor has any such indebtedness been incurred, nor has any definite or certain sum of money or any other sum of money been lent or become due or owing or forborne to be paid, being paj’-able, for which the said mortgage was made as security, except only the said bonds of the par value of two million dollars (§2,000,000). Nor does there now exist any indebtedness or obligation of the said company which is secured or intended to bo secured by the said mortgage except the two million dollars (§2,000,000) in par value of bonds aforesaid. It is not known whether anjr bonds other than the said two million dollars (§2,000,000) in bonds will ever be issued under the said mortgage or secured thereby. If any bonds in addition to the said two million dollars (§2,000,000) bonds issued as aforesaid shall be issued, they will be issued in the future by reason of matters not now known. At the time of the execution and delivery of the said mortgage there were annexed thereto internal-revenue stamps to the amount of nine hundred and ninety-nine dollars and fifty cents (§999.50), that being at least as much as the entire amount of revenue stamps due upon the said mortgage and for the reason that the ‘definite and certain sum of money lent at the time or pretdously due or owing or forborne to be paid, being payable,’ for which the said mortgage was made as security, aid not exceed the sum of two million dollars (§2,000,000). At the time of. the forcible collection by the said collector of the said four thousand two hundred and forty-two dollars (§4,212), no internal-revenue stamps were .aifixed to the said mortgage or delivered to the said company, although the said company demanded and required that if it were compelled, as it was compelled, to pay the said sum by way of tax on and by reason of said the mortgage stamps therefor should be delivered and affixed to the said mortgage. The said company claims that there was no authority whatever to make the said assessment and that the same was wholly invalid and void. The said company further claims that there was no power or lawful right to make any such assessment or to distrain therefor or to collect the same or any interest or penalty thereon by force or otherwise.
    “Copy op Assessment.
    “17.' — Revised April, 1895:
    “Notice of and demand for taxes assessed. United States internal revenue.
    “List for month of Dec., 1898.
    “Div. Ofpice op Collector op INternal Revenue,
    “1st District, State op hi. Y.,
    “ 
      Jcm. ®5th, 1899.
    
    1M. Edison Electric III. Co.
    
      yn: Broold
    
    “You are hereby notified that a tax, under the internal-revenue laws of the United States, amounting to four thou-saud/100 dollars, the same being a tax upon S. T. mortgage, has been assessed against you by the Commissioner of Internal Revenue, and transmitted by Him to me for collection. Demand is hereby made for this tax. This tax  due and payable on or before the  4th day of  Eeby., and unless paid within ten days after this notice and demand it will'become my duty to collect the same with a penalty of five per centum additional and interest at one per centum per month.
    “Payment may be made to me at my office.
    “Frank: R. Moore, Collector.
    
    “ Bring this notice with you.
    “(Form 21.)
    “General demand ) “Internal-Revenue Service, for taxes. >- “ 1st Dístrict oe N. Y., “Dec. list. j 11 Collector's Office, Feb. 6, 1899.
    
    “Edison Electric III. Co.
    “A tax, under the internal-revenue laws of the United States, amounting to four thousand two hundred forty-two 00/100 dollars, being for S. T. mortgage has been assessed against you by the Commissioner of Internal Revenue, and transmitted by him to me for collection. The same not having been .paid within the time required by law, you became liable to pajr five per centum additional upon the amount thereof, and interest at the rate of one per centum per month from the 4 day of February, 189 — , and demand is hereby made upon you for the said tax, with the additional five per centum, and such interest as may accrue before payment. If not paid within ten days from the personal service or mailing hereof, it will become my duty to collect the same b3r dis-traint and sale of property.
    “Payment may be made to me at my office. .
    Ain’t of tax...§4,000
    200
    Penalty... 42
    Total S4,242. 00
    “Frank R. Moore,
    “ Collector.
    
    “Bring this notice with you.”
    
      Thereafter and on or about the 22d day of March, 1900, the said Commissioner of Internal Revenue duly made and filed his findings of fact and decision, allowing the said claim; and notice of such decision and allowance was given to this claimant by a letter from the said Commissioner of Internal Revenue to Messrs. ■ Parsons, Shepard & Ogden, attorneys and counselors at law, of Ro. Ill Broadway, New York City, and who were the attorneys of the claimant, dated the 22d day of March, 1900. The following is a copy of the said findings of fact and decision:
    “This company executed a mortgage securing bonds to the value of $10,000,000. Bonds to the value of $2,000,000 only were issued thereunder and stamps to the value of $999.50 were affixed to the mortgage. It was held at the time that the mortgage should have been stamped to the value of the bonds aufliorized to be issued thereunder, and the additional tax of $1,000 was assessed, which, with the penalty and interest, ággregating $1,212, was paid February 17, 1899. The mortgage required stamps only' on the value of the bonds issued thereunder; that is, $999.50.
    “The claim is hereby allowed.
    “G. W. WilsoN, Commissioner.
    
    “(J. T. B.)”
    Y. The defendants have made no attempt to impeach the allowance made by the Commissioner of Internal Revenue on the ground of fraud or mistake of fact.
    
      Mr. Edward M. S7iejj7ierd, Mr. C7iarles A. Collen, and Mr. Janies II. Hayden for the claimant. Smith, <& Uar7cness, and Darsons, SJiep7ierd, and Ogden were on the brief.
    1. Any doubts as to the jurisdiction of this court in cases of this character which may have arisen under the- decision in the case of NicJiols v. United Stales (7 Wall., 122) have now been settled and under the recent decisions of the Supreme Court and of this court there can now be no question that this court has jurisdiction. {United States v. Kaufman, 96 U. S., 567,569; United States v. Savings Dank, 101 U. S., 728, 731; Medbury v. ZZ.N, 173 U. S., 192-197; Dugan v. U. S., 31 C. Cls. R., 158, and cases therein cited.)
    2. It seems that, as the meaning of this provision of the statute is entirely clear and unambiguous, there is properly no room for construction, and that this case should be decided in favor of the petitioner on the language of the provision of the statute under which the tax was imposed. (Am. & Eng. Eney. Law, vol. 23, p. 298; Sedgwick on Const. Law, p. 231; Cooley on Const. Lim., 5th ed., 68.)
    3. In construing any statute or revenue law authorizing the imposition of a tax, certain well-established rules of construction' must be borne in mind. The first two of these rules are elemental. “The words employed are to be given their plain and ordinary meaning.”
    “The words of a statute, if of common use, are to be taken in their natural, plain, obvious, and ordinary signification and import.” (1 Kent’s Com., p, *462.)
    “The words are to be taken in their natural and obvious sense, and not in a sense unreasonably restricted or enlarged.” (Story, J., in Martin v. Hunter's Lessee, 1 Wheat., 304, *326.)
    “ Each word employed by the legislature must be given its due effect, and no word must be disregarded.”
    “Certainly we are to give effect to all the words of a statute, if by a reasonable interpretation that can fairly be done and it involves no repugnancy to other provisions and is not inconsistent with the apparent objects of the statute.” (Story, J., in XL 8. v. Bassett, 3 Story liepts., 389.)
    . “It is the duty of the court to give effect, if possible, to every clause and word of a statute, avoiding, if it may bo, any construction which implies that the legislature was ignorant of the meaning of the language it employed.” (Harlan, J., in Montclair v. Bamsdell, 107 U. S., 147, 152.)
    “Effect is to be given, if possible, to the whole instrument and every section and clause. If different portions seem to conflict, the courts must harmonize them if practicable, a.nd must lean in favor of a construction which will render every word operative, rather than one which may make some words idle and nugatory.” (Cooley on Const. Lim., 5th ed., 70.)
    The rule that tax statutes should be strictly construed has long existed, and its necessity is apparent when we consider the proceeding to which it is applied — the taking of private property without direct compensation. Exceptions to the rule should not be lightly created. The remedy for any public loss which its application may entail is with the legislative body which has only to cast its statutes in words which will clearly and legally express its purpose. But once the tax is properly created, it is but just that its operation should not bo hampered by a too strict construction of provisions regulating the detail of its enforcement. So construed and so applied, each of these rules may be given effect, and the one is the natural and proper supplement of the other. The- tax must therefore be imposed in clear and unambiguous language, and the terms of the act must not be extended by judicial interpretation. The authorities, we think, sustain this rule of strict construction. {Adams v. Bancroft, 3 Summ., 387; F. S. v. TYigglesworth, 2 Story, 369; Ilartl'ranft v. Wiegmann, 121 U. S., 609; Tvrine Go. v. Worthington, 141 U. ¿., 468; Matheson c% Go. v. U. S.,11 Fed. Rep., 394; Rice v. Tr. S., 53 Fed. Rep., 910.)
    4. Applying these rules of construction, the statute must bo construed to impose a tax only on the amount actually owing at the time of the execution of the mortgage.
    The words of this provision utterly eliminate the idea of future liability, and deal solely with the present actual existing indebtedness. Thejr absolutely limit the tax to the amount secured by the mortgage at the time of its execution. If these words be given their plain and ordinary meaning the provision is absolutely clear. The meaning of the words must not be distorted and strained in an attempt to gain a different interpretation. Anjr such different interpretation is possible only by entirety disregarding these limiting words and reading the provision as though they did not exist. What authority can there be for such a mangling of a perfectly plain statutory provision? What then becomes of the rule that each word is to be given effect? Here are words of great importance to the taxpajmr, clearty limiting his liability, which the Government seeks to have stricken out of the statute. That would amount to the amendment of this statute in a material respect. Amendments of statutes must be bjr legislative act and not by executive interpretation. {First Fat. Ranh v. Morsell et a!., 1 McArthur Rep., 155.)
    
      Mr. Felix JBrannigan (with whom was Mr. Assistant Attorney-Gen eral Pradt) for the defendants:
    The contention of the Comptroller that the administrative construction of the statute which levied the tax adopted by the Commissioner of Internal Revenue when he allowed a refunding claim for the tax so levied was erroneous, and therefore is not binding- upon the accounting officers of the Treasuiy Department, is strongly supported by- the decision of the Supreme Court in the case of the Wisconsin Central Railway Co. v. United States (161 U. S., 191). The governing question before the Comptroller was as to whether a payment by a disbursing officer of a refunding- claim allowed by the Commissioner of Internal Revenue in mistake of law should be authorized by him. Such a paj^ment would render the payee a debtor to the United States, and it would be the official duty of the Comptroller to superintend the recovery of the debt, “and for that purpose to direct such suits and legal proceedings and take such measures as may be authorized by law and are adapted to enforce the payment thereof. ” (Rev. Stat., sec. 269.) As it is the duty of the Comptroller to superintend the recovery of debts due the United States, it must certainly be his duty to prevent the incurring of such debts when he can do so. Mr. Chief Justice Fuller, delivering the opinion of the Supreme Court in the Wisconsin Central Railway case, above cited said:
    “* * * it has long been settled that the action of executive officers in matters of account and payment can not bo regarded as a conclusive determination when brought in question in a court of justice” (p. 205).
    He further quotes the ruling of Chief Justice Richardson in the case of Bcvrnes v. District of Columbia (22 C. Cls. R., 366, 394) as follows:
    “ The doctrine that money paid can be recovered back when paid in mistake of fact and not of law does not have so general application to public officers using the funds of the people as to individuals dealing with their own money, where nobody but themselves suffer for their ignorance, carelessness, or indiscretion, because in the former case the elements of agency and the authority and duty of officers and their obligations to the public, of which all persons dealing with them are bound to take notice, are always involved.”
    And says:
    “We concur in these views, and are of opinion that there is nothing on this record to take the case out of the scope of the principle that parties receiving moneys illegally paid by a public officer are liable ex aequo et bono to refund them. ”
    
      The principle stated in this case is that:
    “As a general rule, and on grounds of public policy, the Government can not be bound by the action of its officers, who must be held to the performance of their duties within the strict limits of their legal authority, where bjr misconstruction of the law under which they have assumed to act, unathorized payments are made. ”
    It would seem to follow that where, by misconstruction of the law, an award has been made by the Commissioner of Internal Kevenue for the refunding of a tax, his action is not binding upon the Government. Therefore, if the Comptroller of the Treasury should be called upon to authorize the payment of such an award it would be his official duty to regard the award as not binding upon the Government and to leave the claimant to his remedy in the courts of law. In this view of the case it must follow that in the present suit the Government is not estopped from defending on the grounds that the award was made in mistake of law and therefore not binding upon the courts. The award creates no greater liability than an account stated by a public officer in which an illegal credit has been given or allowance made. In such case the rule seems to be that.the award nniy be impeached for mistake of law. Speaking of the right of the head of a Department to review a predecessor’s decision as extending to mistakes in matters of fact arising from errors in calculation, and to cases of rejected claims in which material testimony is afterwards discovered and produced, the Supreme Court say in the same case:
    “But if a credit has been given, or an allowance made, * * * -the judicial tribunals of the country must be resorted to, to construe the law under which the allowance was made, and to settle the rights between the United States and the party to whom the credit ivas given. * * *
    “No statute is. necessary to authorize the United States to sue in such a case (p. 206).”
    The Court of Claims is a judicial tribunal with express statutory authority to determine the legal liability1" of the United States upon “all claims founded upon anj^ law of Congress.” Hence it has jurisdiction to construe the statute upon which the award in suit was made.
    
      
       In case of income tax for any calendar year, this should be a date after July 1 following.
    
    
      
       Insert here the word “became” in case of income tax, and in all other cases the word “is.”
    
    
      
       case of income tax insert here the date “First day of July, 189-,” the year to be that next succeeding the calendar year for which the income tax becomes due; in all other cases insert a date ten. days later than that first above given. 2-707
    
   Howry, J.,

delivered the opinion of the court:

This is an action to recover the amount of an allowance made by the Commissioner of Internal Revenue on the application of plaintiff .for a refund of internal-revenue taxes, including penalty and interest. The tax was assessed under that provision of the act of June 13, 1898 (30 Stat. L., 418), which provides as follows:

“Mortgage or pledge of lands, estate, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the pajunent of anjr definite and cer - tain sum of money, lent at the time or previously due and owing or forborne to be paid, being payable; also, any con-vejmnce of any lands, estate, or property whatsoever in trust, to be sold or otherwise converted into money, which shall be intended onty as security, .either by express stipulation or otherwise, on any of the foregoing exceeding one thousand dollars and not exceeding one thousand five hundred dollars, twenty-five cents; and on each five hundred dollars or fractional part thereof in excess of fifteen hundred dollars, twenty-five cents.”

It appears that on or about October 1, 1898, plaintiff executed its first consolidated mortgage to secure an issue or issues of bonds to an amount which should in no event exceed, when taken together with the amount' at any time outstanding of existing first-mortgage bonds of the company, the amount of the paid-up capital stock of the company at the time of issuing bonds, or an amount equal to two-thirds of the value of the corporate propert}1, in case such two-thirds value should bo more than the amount of the paid-up capital stock and which should in no event exceed the sum of $10,000,000.

By the terms of the mortgage it was provided that, at the time of the execution of the mortgage, bonds were to be issued not to exceed $2,000,000, and that no further issue of bonds was to bo made, except for betterments which might thereafter be made to the property of the company, until October, 1900, when $1,800,000 of bonds were to be issued to redeem certain first-mortgage bonds. The balance of the bonds, not exceeding $6,200,000, were to be issued for betterments if and when made. At the time of the execution of the mortgage and the issuing of the $2,000,000 bonds therein provided for, being a time prior to February 28,1899, internal-revenue stamps of the value of $999.50 were affixed, that being the proper amount of tax on $2,000,000, the sum then secured by the mortgage. Subsequently, but before the additional $1,800,000 or any further bonds were issued, and under a decision made by the Commissioner of Internal Revenue that the mortgage should have been stamped on the basis of $10,000,000, the company was assessed an additional tax of $4,000, which sum, together with $242 penalty and interest, was collected from the company by distraint. Upon petition to the Commissioner of Internal Revenue asking a refund of the sum so distrained the Commissioner decided under section 3220 and the regulations prescribed by the Secretary of the Treasury September 26, 1899 (pursuant to the statute), which were duly complied with, that the amount collected by distraint should be refunded. This amount was certified to the Treasury Department, where payment of the sum so awarded was refused on the ground that the assessment had been properly made. Thereupon this action was instituted.

Section 3220 of the Revised Statutes provides that—

“The Commissioner of Internal Revenue, subject to regulations prescribed by the Secretary of the Treasury, is authorized, on appeal to him made, to remit, refund, and pay back all taxes erroneously or illegally assessed or collected, all penalties collected without authority, and all taxes that appear to be unjustly assessed or excessive in amount, or in any manner wrongfully collected.” * * *

We take the view that any doubts as to our jurisdiction to entertain the claim on the allowance arising under the decision in the case of Nichols v. United States (7 Wall., 122) have been settled in at least two cases. In United States v. Kaufman (96 U. S., 567) the question of jurisdiction upon the allowance of a claim by the Commissioner of Internal Revenue under the authority of a statute similar to that under which the present allowance rests arose upon the appeal of the United States from the decision of this court where it appeared that the Commissioner had made an award and judgment was rendered by this .court for the amount.

In affirming the judgment the Supreme Court explained the reason why the Court of Claims did not have jurisdiction of a suit to recover back duties upon imported goods illegally assessed, saying that the same rule applied to internal-revenue cases where the decision of the Commissioner upon appeal was adverse to claimants. In such cases the appellate court said a special remedy is given by suit against the collector if the necessary steps are taken to secure the right to sue at all. But that was not Kaufman’s ease. There the claim had been presented to and allowed by the proper officer, and the court drew the distinction between an action on the allowance of this officer and those cases where the special remedy was given against the collector. The reason assigned was that where the. liability is created by statute the special remedy provided by the same statute is exclusive. Taking up the question at issue, the right of the party obtaining an allowance to make it the basis of a suit in the Court of Claims and the jurisdiction of the court to entertain the complaint, Chief Justice Waite said:

“The claimant has pursued the statutory remedj'- to the end. He is satisfied with the decision that has been given and insists upon the payment which the Government has undertaken to make. Ko special remedy has been provided for the enforcement of the payment, and consequently the general laws which govern the Court of Claims may be resorted to for relief, if any can be found applicable to such a case. This is upon the principle that ‘a liability created by statute without a remedy may be enforced by an appropriate common-law action.’ (Pollard v. Bailey, 20 Wall., 527.)
“It is now insisted that the finding of an allowance bjr the Commissioner is not enough, and that the court should have gone behind the allowance and found the facts in respect to the original claim. Such, we think, is not the law. To say the least, the allowance of a claim under this statute is equivalent to an account stated between private parties, which is good until impeached for fraud or mistake. It is not the allowance of an ordinary claim against the Government bjr an ordinary accounting officer, but the adjudication by the first tribunal to which the matter must by law be submitted. Until so submitted, and until so adjudicated, there is not even a prima facie liability of the Government; but when submitted, and when allowed upon the adjudication, the liability is complete until in some appropriate form it is impeached. When, therefore, the court found the adjudication against the Government, without impeachment, the liability to pa}T ivas established. We do not decide that in the Court of Claims the adjudication of the Commissioner may not be impeached, but we do decide that, until impeached, it is binding, and that the affirmative of the impeachment is upon the Government.”

In United States v. Savings Bank (104 U. S., 728) payment was refused to a plaintiff whose claim had in due time been presented on appeal to and allowed by the Commissioner of Internal Revenue. In approving the principles declared in the Kaufman case the court said:

“We can not discover any material difference between the powers of the Commissioner under section 3426 and those which he has under section 3220. Under section 3426 he is to ‘allow’ the claim, which is done either by giving other stamps in lieu of those that have been spoiled, etc., or by refunding the amount or value. Under section 3220 he is to ‘refund’ or ‘pay back.’ His payments of money in both cases must be made through the accounting officers of the Treasury Department, as he is not himself a disbursing officer. Whether his allowance is conclusive on the other officers, through whose hands it must necessarily pass before it can be paid by the Treasurer, we did not then and need not now decide. All we said then, and all we say noiv, is that if payment is not made by reason of the refusal of any of the officers of the Department to pass or pay the claim after it has once been allowed by the Commissioner, the allowance may be used as the basis of an action against the United States in the Court of Claims, where it will b q prima facie evidence of the amount that is due, and put on the Government the burden of showing fraud or mistake. This burden is not overcome ly proving that some other officer in the subsequent progress of the claim through the Department declined to do what the law or the Treasury regulations required of him before payment could be obtained. The fact of fraud or mistake must be established by competent evidence, the same as any other fact in issue. An allowance by the Commissioner in this class of cases is not the simple passing of an •ordinary claim by an ordinary accounting- officer, but a statement of accounts by one having authority for that purpose under an act of Congress. Until an appeal is taken to the Commissioner no suit whatever can be maintained to recover back taxes illegally assessed or erroneously paid. If on the appeal the claim is rejected, an action lies against the collector (Rev. Stat., sec. 3226), and through him, on establishing the error or illegality, a recovery can be had. If the claim is allowed, and payment for any cause refused, suit may be brought directly against the Government in the Court of Claims. This, it seems to us, is the logical result of the legislation of Congress upon the subject. A rejected claim may be prosecuted against the collector, and an allowed claim, not paid, may be sued for in the Court of Claims.”

But it is contended for the defendants that a distinction between the effect of findings of fact and the conclusions arising from the facts found has since been drawn, the conclusiveness of the action of the Commissioner being restricted to the facts before him and not to deductions drawn from the facts resulting in his official award. (Medbury v. United States, 173 U. S., 492.)

Medbury’s claim arose under the act of June 16, 1880 (21 Stat. L., 287). That act provides for repayment of money theretofore paid where public lands have been entered and where the entry is subsequently canceled for conflict, or where such entry was originally erroneous but can not be confirmed, or where parties have paid double minimum price for lands afterwards found not to be within the limits of a railroad land grant. Section 3 of the act authorizes the Secretary of the Interior to cause repajunent to be made in certain cases out of any money in the Treasury not otherwise appropriated. Application having been made to the Secretary for the repayment of the excess price where the party claimed to have paid double minimum price for land after-wards found not to be within the limits of a railroad land grant, and payment having been refused, suit was brought to recover the excess. In affirming the judgment of this court and dismissing the petition on its merits, the Supreme Court held that the claim was one which this court had jurisdiction to determine— a view which this court had not taken in the matter of jurisdiction.

In delivering the opinion of the court, Mr. Justice Peck-ham says of the act of 1880:

“The question then arose as to the remedy, and you look in vain for any in the act itself.”

By this Mr. Justice Peckham undoubtedly means a judicial remedy.

The act 13th July, 1866 (14 Stat. L., 152), now Revised Statutes, section 3226, provides for internal-revenue cases like this a judicial remedy. (The Collector v. Hubbard, 12 Wall., 8.) This grant of á judicial remedy to such claimants constitutes what the Supreme Court calls in Nichols case “a system,” containing an exclusive jurisdiction. It also constitutes a substantial distinction between the decision in Med-bury and Kaufman. In the one class of cases this court can review the decision of the Secretary of the Interior upon the law if not upon the facts; in the other the decision of the Commissioner of Internal Revenue, if adverse to the claimant, can be reviewed in other tribunals and, if favorable to the claimant, is final unless it be impeached. Its correctness can not be reviewed either by the accounting officers or by the courts.

It was made clear that Congress did not intend, in cases arising under the act of 1880, to make the decision of the Secretary of the Interior final. The reason given by the court carries the explanation. The act creating the right did not supply the remedy.

Section 3220 furnishes a complete scheme by which the Commissioner of Internal Revenue under Treasury regulations is made an appellate functionary to remit, refund, and pay back all taxes erroneously or illegally assessed or collected and all penalties collected without authority. It goes further. The Commissioner is authorized to remit, refund, and pay back, taxes that appear to be unjustly assessed or excessive in amount or in any manner wrongfully collected. His functions are not intermediate like those of a collector who maj1- levy an unjust tax and refuse to remit its paj'ment, or like those of the Secretary of the Interior under the act of June 16,1880, who majr refuse repayment, but whose decision is not final. It was the allowance which the court declared in Kaufman (and reaffirmed in Bank) was not open to review.

The allowance in the present case must be treated as a lawful demand; an award all sufficient for the foundation of a judgment. The award is not impeached for fraud in procuring it nor for mistake of fact in making it. Judgment will therefore be entered for plaintiff in the amount of the tax, together with penalty and interest found due by the award.  