Petition for Writ of Certiorari — Armour v. United States

Supreme Court brief1959

Ask Donna

What actually matters in this document.

Text

aes

PME UNITED STATES CP AMERICA

A\PITQL PACKING COMPANY, FRYER & SFILLMAN,. FN

“* .PEPPER PACKING COMPANY, 3.

_ FHE UNITED STATES OF AMERICA

PETITIONS FOR WRITS OF CERTIORARI TO THE

haitdion STATES COURT OF CLAIMS

RNON. Tr ’ F | = 4

$ e

SAME e ‘ Wa em |

' CH) L1) XC,

*hRENNE by

2 \\ lieRS ? ”

Ps. }

f ) 195U

—_

en wn: =

’

\- .

Pic CORT - Pottice

on | ie e © . Ry F ‘

ee “F : ¢ ; i os

/ ~ -

« Pa ce . |

~ : ' 1 yh i

a = *

a WN

HIP t if the U ited. St tr

Supreme Cour uf the Unite ates

October Term, 1959. ;

. -

“T6 3

AND COMP ( Dae { | WA Ltqi

DVAHY PACKING COMPANY tit RATH PACKING “COSIPANY: ard

WILS & CO, ENE

| fe Mer

4 o°

Hi, tNL ESTATES OF AMERICA -

i] e

1Jr on Se PS tet tf i ol ee oe If Oe ae Se B \ Hii.

K COMPANY, 1 LL EMAN ‘ER PHODS CLE, JOR-CATL DAR ()

i: ANNA TA CE CAR PACK LCARE ECL EM CEEVELANR DECERL! RY

} | {(s {3 Fe os! M aN NLINA ( ’ Jor : ! TE tes “4 C) pi .\s RR Y

RATAN. & (590 J ERIPDLANDER & (O.. FREIT DISTRIB OF a A $5, ae

LEY-MAKON & CO. St. LAPIDUS & -SUINS BOLE S SUNS. i VRSHALE

1XC.,, JOHN MICELLE: INC, MINUTE SPAED COBRORKATION, |S. -D,-

SH; NATIONAYT. PRODUCE DISTRIRE TORS Px PACT I4 GAMRLE

Ga (0) L}dtos Be ae is A wee Wee aks ames | ty ees SE ee eee SAN SON z... SONS

O.,, JOSEPH: S SANSONE, BEN B Si MIWARTZ & SONS, UNE at Niort Sa

WEEKS, INC. and PHOMAS IM. ZINGALIE, . *

\ ; Petitioners,

ae 7 =)

Say

I'NDEX

Qpinions Below s Set bak pes ae acc nots

Jurisdiction Me pages dewaeeteuas De dnuwaawen gens

Question Presented reer re Tere err ind enna

Statutes and Regulations Involved ......; eet Pee

Statement ...... Retenckieceued os (AS nasaeensanees

Reasons for Granting the Woeit.....: : rey Tore eer

Conelusion sec eeees ins 44. CheN Sina ARERR An oes kee

Appe ndix | See eererr ESTEE eee

Swift & Co. v: U nited States, ‘1: 36. C t. C1). 394, 144 F:

» Supp. 956

Opinion and Findings of Fact and ¢ ‘onelusions

of Law a

+ ; . 3 .

Appendrs Bo OES eee SO es ea AP Races

1 59 F. ee a

Opinion and Judgment +"

Oe ee a Ee eS ee ee oe oe oe oe Te a

Appe mdix -C.. er ee ;

Armour & Co. et al, v. U nite States, N6. 544- ~

apd Anderson Food Processing Co. et.al. 4

United States, No. 376557, 169 F. Supp. 521

| ne and Judgment

Ap pendix D—

Armour & Co. et al. ~. United States, No. 344-57 +

and Anderson Food Processing Co. et al. y.

United’States, No. 376-57 ”

‘Order Denying Reheating’

. - P

g .

* iil :

. PAG!

Appendix K=...... 5 ie aE ee gaat og sues | Perera /S 7&

Capital Packing Co. et al. v.. United States, |

No. 337-97 | ‘

‘Order for Judgment 7”

_ sAppendis:F peek ane Ghee ee : SANE we Leese i

- Capital Packing Co. et al: v. United States, ae) .

“No, 357-57. « - ine ct nt ae ee erie

_ Order Denying Rehearing ll

ees: a Citations me

Cases: ; 2 ; aq ; pager ss : ; - \

Anderson Food Processing Pa Set al. ve United

States, No. 376-57, Ct. Cl, 169 F, Supp. (1959) . .5,6. —

Armour ‘& Co. et-al. v. United States; No. 85-57,

Ct. CL,,£59 F. Supp. 380 (1958). 2. 0.5\.. ‘ahacs pe

Armour‘& Co. et tal. v. United States, No. 300-5 “07 Ae)

Ct. CL, 159 F. Su upp. ‘380 (1958) ....,0eeeeseae. ee

Armour & Co. et ‘ai v. United States, No. 544-57, oe

, UCt. Cl, 169:F: Sapp. 521 (1959) ....2/.007..2. 56

~Armour & Co. et al. v. United States, Nd. 521-58, | -°..

ee | ere eer rp reer Vero. edn oe

Avoset Company v. United States, Civil No. 36905, —

U.S. 2. Ct. Northern Districtof California .

p94 CIDGBY: skis case's Dube ctiae ye am ieceeben ees sae

Beber et al v, United "States, U. 8, D. Ct 167.F. |. “

Supp. 169 (1958) Sieegeneeeee cinivana via 6

Black Canyon ‘Produte, Ine. ot al: v. _ United States, |

No. 87-58, Ct. Cl (1958) Seer eer pata eee ee

Capitol Packing Co. et al. vet United States,

No. 307- a, a: CL (19. OEE nee atai kc aea 6

Charles Een Te

aa Corned! Steamboat Co.y, < aifed State 5,9

O40, al ‘d 321 U. Ss. 634 (1944)

a ee

Haste ‘rn Air T ranispor Ine. v. Care

es mission, 289° U.S. 147, 152-3 A as

Edelman Vv. Boel ‘ing’ Air T rans sort,’

249: (1933)

‘L itaak Meat Company Al nited States, Civil No.

Oita 1 by (S$. D. Ct. toy the Distriet of Colorado

(1959y~ ETD Caf GUE P AME Pea E aR Tt eT RAM

‘Nashville < St. A. Ry. Co. 6 Willies.

» 249 , POD Shed dee Nee a he ee es

oe a: Py is -—— 3

Seay gs Co, . United States, 277 F. 9

Inte rnal Revenue ( ‘ode. of 1929;

‘ Section 3475 (26 q. S.C. 1952 ed. See. 3473)...

Internat Si caste ( ‘ode of 19. re

‘ Section 427 1 (a) . Pe Pe Per re ert

7s, ——

Interstate C: ‘ommrcree Act:

Hepburn Améndment—49 tp eee C. A. $1(3).

T reasury Regulations- 113: a

Se ‘ction 143. f Pm as ated ak Ree OLE. ek

_ ~N

i. ?

: Br.

4 MH! .

\ ae:

Abbate Co, ) Jarvcki: of “a No.

MOTT, US. DOCH. Senttiorn District of Wh.

hols, pier inion t, ey, sels Se pace vR cg taca te Seca PA

Cleveland © a, 27 et St a Rt. Ko. _Deatle hac yi

U.S. a88, “i PRE ol pecnden aie caren

‘Inc., 289 U. S.. -

298 U.S.

SD, aff’ 242 US 368 | Ee Re ae eee

Swit &Co. v. United Staffs, 136 Ct. CL B04, 144

EF Supp. 056 (1956) area piao tape anal,

uh States v. Calami iro, B54 U.'S, 351, 357. (1957)”

Srarures:: Di. rae ) 1

4, Tt.

9.10.

we*.

IN THE oan : .

» Supreme ies of. the Huited Biates

October Term, 1959

No. ‘

ARMOU R. AND COMPANY, “APMOU Rk: AND “COMPANY OF DELAWARE, .THE

CU PAHY PACKING COMPANY, THE -RATH -BACKING COMPANY = and

WILSON & CO, INC, Pn eT bangin

tack , =o eae “ ‘ Petitioners,

THE UNITE D: STATES OF: AMERICA

ANDERSON FOOD PROCESSING CO., EDW: 3. ANDE RSON & CO. INC. THE

AUSTER COMPANY, INC., BATEMAN FROZEN FQODS CO. JOE CALDARULO

CO.. CANNATA CEEERY CO., JACK CARE CO., INC, CLEVELAND CELERY

MARKET CO., GIANUKOS-MANDOLINI CO., DIXON FRUIT CO., “gg tot

FINERMAN .& .CO., L. -FRIEDLANDER & CO., FRUIT DISTRIBUTORS, INC

GRIDLEY-MAXON & €O.,'M. LAPIDUS & SONS, D. LEO & SONS, MARSHALL.

FRUIT, INC; JOHN MICELI, INC,-MINUTE MAID CORPORATION, Se

MONASH, NATIONAL. PRODUCE DISTRIBUTORS, INC, PACIFIC GAMBLE

CO., JOSEPH S. SANSONE, BEN .B. SCHW ARTZ. & SONS, “INC, “‘SUNKIST

GROWERS, INC. and THOMAS M. _ZINGALIE,

2 bé ¥ Ae Ny v. z .

THE UNITBD STATES OF AMERICA

CAPITOL .PACKING COMPANY, FRYER & STILLMAN, INC,

» PEPPER PACKING COMPANY,

. a uU - Pt « ‘eer *

< ore THE inna OF ‘AMERICA

——_—

_ PETITIONS FOR WRITS OF CERTIORARI TO THE ,

a UNITED STATES COURT OF CLAIMS

6 Potlileuses: pray, that Writs of. Certiorari be issued’ to”

review the judgments of the Court-of laims in the above

Rigs entitled cases. - , ‘ ;

Opinions: Below: : Sekt ah A oe

The opinions the Court of Claims (R. 285) age os

portedat = Ct. Cl. » 169 F. ‘Supp. 521 (Appendix © and

.E). , ; : cs — ,

’

_ ROBINSON CO., THOS. D. PALELLA’ & SONS, INC, J. F SANSON & SONS.

" Petitioners,

Petitioners,

, r as!

“ aes Jurisdiction :

* The judgments of the Court of. Claims sought to be ie.

> Viewed were entered on. January 14, 1959 (RL 285 and 99),

The petitioners filed timely? petitions for rehearings which.

were denied by orders‘of the Court-of Claims enteréd on

April 8,-1959 (R. 344 and 103). Jurisdiction this Court /

is invoked under 28:U. S. 5/88 Section 1255(1). ae oe Sey,

Question Presented — - ae

charge for the placing of ice and’salt in the bunkers of rail

refrigerator cars.’ The question presented is:

/ wi : ‘ - ” eh . = . : * » At

Wahether the word ‘‘transportation’* in the Transporta-

tion of Property Tax Law: ‘tion 3475 of the Internal

Revenue Code of 1939: Section 4271[a] of the 1954 Code)

‘included the supplying of ig¢e and salt in the bunkers-of -rail ’

refrigerator cars, _ ip ab ;

' . Statutes and Regulations Involved’ a

‘Internal Revenue Code of 1939: eee o

5.3475, Transportation of property PE Se a

_. paid within or without the United States. for the

transportation of property ‘by rail, motor vehicle,

water, or air from one point in the United States to

another, a tax equal to 3. per centum of the-amount

sb paid, except that; in the case of coal, thé rate of

. tax shall be 4 cents: per short ton. Such tax shall

apply only to amounts paid to a person engaged in -

the business of transporting property for hire, in-

, cluding amounts paid to a freight: forwarder, express .

company, or similar person,” but not. ‘including

Petitioners claim refund ofthat portion of the tax on

the transpertation. of property imposed on the. carrier's

(a) Tak: There shall be imposed upon theamoint -

. amounts paid by a freight forwarder, express coh- %

e <A y e . - na 3

‘ | . sil . .

" 4 - /

{

pany, ‘omsimilar person for transportation with | re-

~ speet to which a tax 1 ar’ ionsly been paid “under.

dhtis, ais eiltale iN (26 U.S. U., 1992 ed. * » J4TO.),

Re- coditied )As behcvenl itil Code of 1954, § 4271, °

Which ree als ui part: : “

f ““(a) Property other than Coal. There Is hereby.

. imposed upon th¢ amount paid, within or without the -

United States for the-transportation of property, ex-

cept coal, by re il, motor ychicle."water, or air from

> .one‘point in the United States to another, a tax equal -

—to3 percent of the amount so paid.” rhe |

‘ Section 4271 of the es Révenue Code of. 1954-has

| heen. repealed. *Pub.. L. &5- 479 « S 4(a), ‘June . 30, 1958, “F2s

Stat. 260. Effectiv e date. peru a 1958.

Treasury Regulations 118 C194: 3 ed. ). 4 143, $3

‘+

? “(dy Transportation. ° The term ‘transporta-

-.. tion’ as used. herein: means. the’ movement of prop-

“y+ + erty by a person enggfged in the business of trans-

caeiee porting property for hire, including interstate, intra-.

- state and intra-city or other local movements, as-well

‘as towing, ferrying, switching, | ete.: In ‘general, i

includes accessorial services furnished in-connection

with the transportation movement, such as loading, -

‘unloading, blocking and staking, elevation, transfer .~

. in transit, ventilation, refrigeration, icing, storage,

demurrage, lighterage, trimming of cafgo in vessels,

: wharfage, handling, feeding and watering. Hivesjock,

. > and similar serviees and facilities.’’ -. ae

gee ~p od ' Statement :

- * The petitioners are” dhlonere of meat, fruits Py vegé- elk

| tables and other perishable progucts by rail in refrigerator

cars which are cooled by icé and‘salt placed in their bunkers.

They seek to recover moneys paid to the United State#as

tax on the charges -by rait carriers > for sa os ebsites

of property. | ices ‘

. 7

Se -@— a ~-

_ |

Included in tke rail carriers’ charges Were charges for’

the furnishing of such ice and salty The cost of ice ‘and

salt or refrigeration appeared on the freight bills as dis-.

tinet items, separated trom the line haul charges, Under’

the lgbel of transportation tax, three percent of the charges

for these servicesayas added to the #reight bill’ by the’cag-

riers, who gilso colle ‘ted the tax on thie line haul charges

from petitioners, The carriers’ paid. the tax over to the

United States, rete oot. eens e

Atter such payment of the tax, petitioners filed time ‘ly

claims for refund on the eronnid that Section 3475/a] of

the Internal Revenue Code of 1! OO (Section 4271 [aj of the

1954 Code) iImposad a tax only on tlie amount paid for the

“transportation of property’? ang the it icingiand. salting or

refrigeration gare not costs of the ‘transportation of property:

and therefore not’subject to the tux.

Swift & Company in 1953 brought a test case, claiming

_ a refund of $7,246.67. By a decision rendered: on January

26, £956 the Court of Claims unanimously held+that the

plaintiff Was ¢ ntitled to recover the tax paid on the amonnt

paid for icing and salting. Judge Laramore wrote the. opin-

gion of the court, with Chief Judge Jones and Judges Mad-

deny Whitaker and Ligtleton cone urring. Sw We ompany |

ve Cited Sictes, Bt. Cls. 394, 144 F.Supp. 996 ( Appen-

dix A),- = , Sethe bee

The defendant. refused to abide by the decision and con-

; tinucd to collect the tax. A muffi- -party dction on behalf of

els cht. meat packers was instituted on February 21, 1957 in

ghe Court 6f Claims. As subsequent. claims matured, an-

other multi-party action on behalf of nine packers was in-

stituted on July 2, 1957. Phe plaintiffs in these two actions

moved ,for sunimary Saldiatiacsst and-on March 5, 1958 the

Court of Claims again unanimously directed judgments for”

the plaintiffs. Armour & Company'et al. vo United States,

No. 85-57 and Armour & Company et al. ¥. Umited States,

a a

No. 300-57, 159 F. Supp. 880 (Appendix B). Judge Lara-

amore. delivered the opinion of the court with.Chiet Judge

Jones and Judges Madden and Littleton concurring. Judge

‘Whitaker took no part in the consideration and decision of

the cases. . ; 7 '

. The plaintiffs in the fir§t°two Armour cases eollected

judgments in-the aggregate sum of $355,765.90, plus in

terest. * Re ae ’

After the second unanimous holding that the tax had

heen improperly levied, the government gontinued to collect

the ta®and a‘thirdmulti-party ‘action Was gis stituted by five —

meat packers. on November 29¢.1957 in the Court ‘of Claims,

seeking to recover $98,937, 49. Ti addition, on August od,

1957 a -muilti- party netion was instituted by: twenty- eight

fruit.and ex table Shippers with claims totaling $96, x8,8 34,

The plaintiffs:in these two actions moyed for summary

judgment and on January 14, 1959 the-Court of Claims held

that its two earlier decisions were erroneous and denied |

plaintiffs’ motions. - The Government's cross-motions were

grante d. ‘A single opinion was written. Armour and Com-

pany et at. v. United States, No, 544-57 and Auderson Food

Processing Co. ef'al. «, United States, No. 376-57, 169 F.

Supp. 521 (Appendix (). | It is this judgment that the peti-

tioners seek to review.

Judwe Madden wrote the majorit® cpinion in the. Armour

and Anderson, eases, with Chief Judge Jones and Judge

Whitaker coneurring. Judge Larainore dissented. (Opiition,

Appendix C.) ee cee aa, ae | ak

The plaintiffs in the Armeur and Anderson actions

moved, in the Court of Claims for a rehearing and to ‘vacate

the Judgment of dismissal. These motions were overruled

by®an order dated Aprils, 1999. (Appendix iS ae

In addition to the foregoing actions, there are suits pend-

ing in the Court of Claims brought by a number of the peti-

s e J

. °

4 g

e ‘

tioners in the Armour and ufaderson actions: Armour and

Company et al. v. United States, No.-d21-58, in which seven

meat packers seek to recover $99,889.53; Black Caunyor

Produce, Ine. et al. y. ated Stats, N&R ST-d8, in whieh

twenty-seven fruit and Vegetable shippers sue tor #115,

O79.29, ee oe.

The third group of petitioners ‘for a writ of ‘certiorari

are three shippers of meat Who instituted an action in the

Court of Claims on August 1, 1957 seeking to recover a total

Of $27,600.87, Capitol Packing Company cet alow. United

. or — o« 6 oe . . . . bead

States, No. 367-57, Plaintiffs in that action moved foresum-

smary judgment and ou January ‘14, 1959 the @ourt of

Claims granted the,defendant ’s.Crosssmotion and dismissed

the petition ““* * * on the basis of the opinion rendered this

date in Armour and Company et al. v. United States, No.

O44-57."") (Appendix E.) 'Fhe- plaintitfs in the Capitel

Packing Compaiy action moved in the Court of Claims ‘to

alter or amend the judgment. © This Was overruled by an

order filed on April 8, 1909, (Appefidix F.)

Petitioners are advised that there uie four District

Court adjudications on the same issue, all of which found in

favor of .the Governtpent. coset ‘Company vy. Cnited

. States, Civil No. 36905, Northern’ Distritt of California,

July 31, 1958; Beber, et al. v. United States, 167 F. Supp.

“169, Northern District of California, Southern Division,

October 27, 1908; The Charles Abbate.Co. y. Joh nT. Jarecki,

~et-al., No. C1717; Southern District of Illinois, Eastern

Division, March 18, 1959; Litrak Meat Company v. United

States, Civil No. 5777, District of Colorado, April 14, 19°9.

We are advised that sinfffar actions are pending ‘in

several District Courts and in the United States Court of

Claims.

si .

‘Reasons for Qrentinn the Writs

1. The Court of Claims has upbeétd a Treasury -regula-

tion Which extended the coverages of a tax statute by adopt-

mya definition enacted by Congress in another statute tor

the wholly ditferent purpose of rate regulation: Involved:

here is the question whether the Commissioner of Internal

’ Revenue is to be clothed with the legislative power to ex-

tend the coverage oft a tax statute by such a device.

The tax statute in suit simply imposed a tax on the

‘transportation of property byrail * * *."* No definition

of transportation was. ever enacted thy Congress in this

statute. By regulation, however, the Commissioner under-

took to define ‘transportation’? in this tax scheme by de-

claring it to include various accessorial services rendered

Ay carriers to shippers, including i icing and refrigeration.

The definition thus promulgated by regulation closely‘ fol-

lows the definition of transpo-tation enacted by Congress

in the Hepbarn | Act ame endment to the Interstate Commerce

Act.® ‘

When ‘Congress in the Hepburn; Act defined ‘trans-

portation ‘as ineluding ‘trefrigeration or icing”, it was

ia Thesgexulation in suit “reads in part (Treasury Regulations 113

{1943-Ed.] § 143.1: .

“In general, it includes accessorial services furnished in con-

nection with the transportation movement, such as loading, -un-

’ loading, blocking and staking, elevation, transfer in transit, ven-

tilation, refrigeration, icing, storage, demurrage, lighterage, trim-

tC ming of cargo in xessels’ ?wharfage, handling, feeding and water-.

ing livestock, and similar Serv ices and facilities.” (Italics: sup-

plied.) :

The Hepburn Act amendment to the Interstate ompmuetpe Act reads

in part (49 U. S-C.’A., §1[3]:

“The term ‘transportation’ as used in this chapter Shall in-

clude * * * all services in connection with the receipt, delivery,

elevation, and transfer in transit; ventilation, refrigeration or

‘ icing, storage, and handling of - aeediiind trameported.” (Italics

supplied. )

. . : 5 “a

extending the meaning of that word™to inelude certain’

services which, theretofore, had not been embraced within

it** 7. Pennsylrania R. Co. vy. United States, 227 F’. 911,

919 (1916), aff’d 242 U.S. 308: This Court declared that

Congress did so in order to plug loopholes in the regulatory

‘scheme. If the -supervision ly the Interstate Commerce

C ormmission over rates were confined to the charges for the

carrier’s service as carrier, the earrier could nevertheless

discriminate by under or over-charging one shipper as

against another for accessorial services rendered by the

earrier. Cleveland, C.C. & St. L. R. Co. v. ee 239

U.8: 666 Stn. OS ;

In addition to these holdings that ‘*transportation’’ does ©

not inelude the purchase of ice and salt. or refrigération °

service, other considerations lead to the same conclusion.

. Indeed, the Court of Claims so held in the two earlier eases.

involving this tax and many of these petitioners (opinions

in the Swiff and Armour cases, Appendix A and.B). These —.

“opinions summarize several of the criteria which establish r

‘that icing or refrigeration, are not embraced within dhe

‘meaning of transportation. es *

We note briefly here that ice arene by cither the

shipper. or the carrier for use in railroad car bunkers has i

heen subjected to local sales tax: The Court of Claims. so

found (Swifté Co., Finding of Fact 7[d], Appendix A), If-

7 the purchase of these eommodities for use in interstate car-

- riage was ‘‘transportation’’, the local sales tax would have

. been stricken down as’in violation of the Commerce Clause.

Cf. Edelman v. Boeing Air sett ta Inc., 289 U.S. 249

(1983); ashv ille C.d St. L. Ry. Co. v. Wallace, 288 U.S.

249 (1933 ); Fastern Air Transport, Inc. vy, South Carolina /

Tar ¢ Tommission, 285) U.S, 147, 15 2-3 (1932),

‘The Commissioner, in borrowing the Hepburn Act ’S eX-

tended ‘definition of transportation fo include -ieing and

refrigeration w as clearly tlerefore extending the coverage

of the tax on ‘‘transportation’’. But the Commissioner has

’

no right or power to assume that because Congress, by

special enactment, gave transportation a broadly inclusive |

definition for the purpose of railroad rate regulation, it

must have intended to give the same meaning té that word

in a tax statute. Cf... Cornell Steamboat Co. v. United

States, 53-F. Supp. 349, aff'd 321 U.S. 634 (1944). The’

Commissioner usurped the prerogative of Congress in pro-

viding by regulation that the coverage.of:the tax on trans-.

portation was to ‘be co-extensive With the seope of trans-

- portation subject to ‘the i aaraanent powers of the Inter

state Commerce Conpitsston

This adininistrative ¢ nection does. not ever have the doubt-

ful merit of achieving synnactry. The regulatory powers

of the Interstate Commerce Commission extend only to in-

.terstate ‘transportation: . Tlie. tax in issue, on the ‘other

. . < z , .- cS

hand, applied to intrastate as well as interstate transporta-.

tior. To avhieve symmetry, therefore; the definition of

transportation in the regulatory statutes of all of the States

in the Gnion should have been eonsilted. — *

_ It was for Congress to decide whether such symmetry

‘should be achieved, whether the coverage of the tax should

be extended, whether the purchase of such ice amd salt was

to be subjected not only to Joeal sales tax but also to the

‘transportation tax.‘ As this Court said in Uiited States v.

Calamaro, 354 U.S. 351, 357 (1957), ** Neither we nor the

Commissioner may rewrite the statute simply beeause we -

may feel that the scheme if creates could be. improved

upon.” at ‘

2. The decision of the court below is believed to be,

erroneous. Sanction for the Commissioner’s extension of

this tax by the defining regulation has been found by the

Court 6f Claims in the decision below,in two circumstances :

(a) that a definition similar to. the regulation’s was to be:

found in the’ Hepburn Act, as we have noted, and (1) the.

reenactment by Congress if the 1%. 34 Code of this fax enacted

in 1942. The Court of Claims also noted-that a similar tax

age ee

aon ne aren ee et A one ern ene: ene

“«

statute, interpreted by regulation,-had’ bee n 1 enacted during

the First World War. :

A deeisive answer is to be found in the ¢ Court of € ‘aims’ ;

first opinion in these very cases, when Judge Laramore for

the then unanimous, Court of Claims rejected this. reenact-

ment argument advanced by the defendant, holding that the

regulation under the | ‘TITS tax statute, repeated in 1924,

-cowhd hardly be eousidared to have been approved by.Con-

gressfin ‘1942 when the new tax act was passed; also, that

ous 1954 recodifieation gave no approval of the regulation

“heeduse there is no Showing that: this problem was eailled

to the attention of Congress." (Sv ift & Company opinion,

Appendix A; ef., l nited Stat es Vv. Calamaro, 354 Ur S, 351,

359 119: 7 |.), . i

Maniy of the claims or related claims now in suit, chal.

— Jenging this regulation; had Keen filed with the defendant

a ~ before the time of the 1954 reenactment. It does not appear

that these challenges, or even the regulation itself, were -

ever called.to Congress’ attention. “To held that the rewule-

tion in suit is sanctioned by codification of the tax Jaw in

ma circumstanee ‘sy amiowits to a carte blanche grant of

legislative ‘power to ‘the ‘Commissioner not only in these

cases but in other areas of action.

)

3. This petition there fore ‘presents ¢ a case in which an

-* unwarranted usurpation of legislative power by an ad-

ministrative agency has’ been condoned . by the Court of

Claims, Justifigation cannot be found in the reenactment

rule, or ‘in the similar definition: in the Hepburn Act, or in’

the combination of these circumstances.. What required a

Congressional enactment’ in the’ Hepburn Act—greatly

broadening and extending the meaning of ‘*transportation,’

—tannot bé legally accomplished by a regulation of the

‘Commissioner of Internal Revenue. *

a Neer A exe

* 4 7. . . mp

2 +

CONCLUSION : a eee

—

For the esi sical it is ‘respectfully sub-

Ipitted that these petitions for writs of certiorari should

be granted. sa

Ps "CLARENCE E. Dawsoy, | |

‘ 2 nM, . e. Attorney for Petitioners. »

Weston Vernox, dr. %

1; Li. Reyxer Samer, *

ARTHUR H. Gouppete, © ° es. ;

JesepH C. KENNEDY;

Jousx D. Saviers,

of Cowinse /.

Filed July Ff 1959. | 7 a:

i *

3 ae

; a

ees ‘Appendix A ta | Pam ar

/ \ é

IN THE UNITED STATES: Cov RT OF CLAIMS..°.. * ~ 4

+ ‘Ner'ea2-63 “ | 7 |.

(Decided October 2, 1996) :; 5G ce

° —s - ?

| = Q--—- snc ccecnsniian entices

: Swirt & Company

J . es V. i : . ; as *

e ed . : , 4a . .

Tue Unitep States — ae a"

a . ' * .

Opinion °/.

re des Ay +

LaraMone, Jiige, delivered: the. opinion of the court:

. The plaintiff sues to recover $7,246.67, with interest, ee

“which was paid as. transportation of property tax during z

the period commencing October 1,1948, and ending Decem- ~

“ber 31, 1949. This is a test case. The sole i issues W vhether

the phrase ‘the amount paid * * * for the transportation

“* * of property’? as used in section 3475 of the antes

Revenue Code 6f 1939, as amended, . 26 + U. S. C. $3475.

~ (1946. Ed.), includes. charges ‘by the carrier for the sup-

“| phying- of ice and salt inthe bunkers of refrig¢rator cars Foetus

and accessorial sérvices of switching and demurrage. ” ,

. During.the period involved in this suit plaintiff shipped

ifs products-to various points within the United.States over

the lines of certain carriers by rail. ‘The carrier’s freight

bills for this transportation consisted of’ the following com-

ponents, each stated separately’ thereon: (1) the line haul

charge, 7..¢. , the charge for rail movement of the commodity Moran

inv@ved over the ilistance that it was transported ; (2) -

charges for demurrage and, in the ease of perishable com-

modities, charges for ice supplied by the transporting car-

rier together with charges for switching incidental to . ”

. 7 ~ ; + °

Appendiv A

placement of the ice in the cars containing plaintiff’ s com.

medities ; and (3) a transportation tax equat to three per-

cent of the aggregate charges. ‘The three percent tax was.

applicd enly to charges for serviees rendered plaintiff. by

-the carriers transporting its property. To the extent that.

plaintiff supplied ice -to refrigerate its property while

aboard the carrier’s cars there Was no icing charge made by

the carriers and-no transportation tax collected thereon.

During the period involved the carrier’. transporting.

plaintiff's property collected fronr it a total-of $7;246.67 in.

dong mgt tax attr he able to freight ehar ges, aggr vegat-

Yack de ntak switebiife. The cafricrs duly paid he ine over.

to the collettor -and plaintiff timely filed a claim for its

refund. The: claim: was rejected and this suit was timely i in-

stituted. Theat si ee

The pertinent. part. of section 3475 provides:

There ‘shall be. imposed | upon the anioint. paid

within the United States, after the effective date of |

» _ this section for the tr: insportation, -on or after such

/ eifective date, of property by, rail, motor. vehicle,

: water,-or air from one-point in the United States to:.

unother,’a tax equal to 3sper centum of the amount

so paid, except that, in the case of coal, the rate of.

. ii shali be 4 cents per short ton. Such’ tax shall

| apply only to amounts. paid to a person engaged in’

the business of transporting property for hire, in-

cluding amounts paid to a freight forwarder, express

~ . company, or similar person; but) not. including

‘ amounts ‘paid by a freight forwarder, express com-

- pany, or ‘similar person for transportation with re-

“spect to which a tax has previously been paid uhdér .

this section. acer

The pertinent shirt of Treasury Regulation 113, 26 —

148, 1 ({d) _— Ed.), prov ites ; ‘

ir)

z .

G& »

A ppend r A

The term “traiisportat lyn” as Msed in this part

means the movement of property by a person engaged

in the business of transporting property for hire, in-’

cluding interstate, intrastate, and intra-city or other

local movements, as well as towing, fe rry ‘ing, switeh-

furnished im connection with:a transportation: move-

ment, such as loading, unloading, blocking and stak-’

eration, icing, storage, demurrage, -lighterage} ‘trim:

*. ‘ a . e

ming of cargo in vessels, wharfage, handling, feed-

ing and w atering liv estock, and similar services and

- facilities.’ Pie eat i

The plaintiff challenges this part of the regulation as

~- being invalid because it is an attempt by theCommissioner

_ of Internal Revénue to” broaden the meaning of the t term

transportation as used in section 3475 by. assimilating it to

the definition of transportation\as defined. by Congress in

the Interstate Commerce Act, 24 Stat) 379, as amended by

the Hepburn Act, 34 Stat. 584, 49 U.S.C! 4$1. The plain-

tiff contends that the ordinary and seis understood

. Meaning of the term ti ansporation. does not include icing or

salting or switchin d demurrage, and that it would be

necessary for Congress to qniarge the ordinary meaning in

_ order to include such items. The plaintiff asserts that the

ing, ete. In gen ral, it includes accessorial, Servi ices -

‘ing; elevation, transfer in transit, ventilation, refrig-

ts)

ordinary’ meaning of the term transportation was enlarged |

for purposes of. interstate commerce by the Hepburn Act.

However,. we really do not know whether the ordinary

nreaning was enlarged by: the Hepburn Act Since the term

transportation. was defined before and after the amendment

by rather specific language. The definition -of transporta-

. tion contained in ‘the Interstate’:Commerce Act’ before

amendment provided that ‘“The term ‘transportation’ shall -

include all instruifentalities of shipment or carriage.’’ In

1906 it was enlarged by the ‘Hepburg Act to include, inter

alia, ‘and i in addition to the original definition, “¢all’services

pa’

. definition was enlarged, not that either: of the definitions

in the Zepburn Act.. Whether or riot the definition was bor-

- the statute’: The term transportation i is not defiried by the

Thus opr problem i Is to determine whetIer its ordinary and

" commonly understood meaning ‘is the all inclusive one at:

Ks , em 16

. “Appendix A

in @ nection with the receipt, delivesy, elevation, andt tee:

fer in transit, ventilation, refrigeration or, icing,. storage,

» and handling of property ‘transported. ** The Clev: land, .\

Cincinnati, Chicago & St. Louis Railway Compr ny.¥. Dettle-

bach, 239 U.S. 88, and Ellis v. Inte rstate Commerce Com-

mission, 237 U. S. 434, cases.merely state that the: statutory |

represent the Ordinary meaning of the term

There is some dispute as to w thether:the definition of the

term transportation contained ia the Shove regulation was |

borrowed by the Commissioner fr om the definitfon contained

rowed is mmaterial’ Certainly: the statutory definition of

transportation contained in an act designed for the.purpose

of regulating interstate commerce does net eontrol the

meaning of that term in a‘different act designed for the

purpose of imposing a tax on shippers. Rar ak °

It is.a cardinal rule that the ordinary and commonly un-

de rstood vrgsernd shafl be attributed to the terms employed

in a statute unless ‘the terms are, ones “of art. or defined by.

taxing stafvite, and as far. as we knowis not a term of art.

tributed to it. by the defendant. the very narrow one, given,

to it b* the plaintiff, or perhaps one somew here between «>

the. two. PY ‘ _ .

The plaintiff refers to Ede rita . Boeing Air Tran sport,

Tac., 289 U.S. 249; Inde ‘pendentWarehouses, Inc. +. Scheele,

331 U.S. 60; and In re New York, Ohio & W estern Railway

Co. et al v. City of New York, 161 F. 2d 518, a’s indicating

that some of. these accessorial services, or products are sub-

ject to a state tax, the validity of which has been sustained.

as not being a burden on transportation ‘in interstate com-

merce: ‘The court stated in the. In Re New York Ohio &

Western Railwar ay Co. case that “The demurrage represents

a service agers from transportation “a Sop lie a ae

. . .

, - ’ :

7 . «*

“Afipendix ” RE es

The plaintiff also argues that sinee some of these prod-

ucts or seryices are Subjeet to local taxes, a Federal tax. on,

them also Cn result in double t taxation ‘w hich should ‘be

‘evoided unless, required by express terms of the statute.

It relies on United States v. Sup plee Badd le Hardware Com-

pany, 269 U.S. 189. Although, that case is-dis tinguishable

on. the ground that in that case ‘loth a‘ Federal. tate nnd

F ‘ederal i income tax were. sought on the same seats there -

is some sitmificance to the fact that many: of the states do

impose a tax on-these same items.

It is also Significant that section

taxes the amount. paid the earrier.. Therefore, if the phip:—

per or ‘any one other than the, carrier performed these

services, -or furnished these prodiiets, a tax thereon sould

not be impésed. We can see no logical reason why C ongress

eould have intended to impose:a transportation tax) on the

shipper‘when the carrier ices, loads or-wnloads, ete. the ear.

and not impose a tax 6n the shipper when the shipper or

someone ‘else performs: the identical services. Such a tax."

3473 by its ees ee

- would be Qscriminatory y “against the carriers for no ostensi- ae

ble reason. ‘

We dé not believe that. Congress’ inten led to give’ ‘the

term. transportation the same scope or breadth in section

3475 as it did in the acts regulating iiterstate commerce. ,*

The definition of transportation. coutained in’ the above

regulation is: too broad. The contention of defendant that

this regulation-should be deemed to have received legisla--

tive; appv. without merit. A treasury regulation,

interpreting a transportation tax act in 1918 to 1921 w hen

‘the aét was repeated could -hardly be considered to jiave

Keen, approved by* Congress in 1942 when dnother.trans- *

portation tax act is passed. Thé fact that-€ ongress re-

acted this\section i in the 1954 C ode ‘withont any substan-.

dee change ddes not give approval,te the regulation because

there is no showing that this protien was called to the ¢

‘attention ‘of ongress.

=_ .

: Appendia A men we

me ; ae

‘he case: Of: Proc ter & Gamble Co. v. United States, 28]

Red, Wl, | relied.on bys defendant-in support of its coustruc-

tion, Was dismissed on the. ground that the taxpayer paid

the tax voluntarily and Ww ithout protesf.. The dictum-in the

two- paragraph opinion ‘did state that the transportation

tax Was payable on ‘demurrage, citing only interstate eom-

-meree regulatomw Cases. We believe the dictum was w rong.

We believe that Congress intended to impose a tax on

“the amount paid for actual transportation and not on Bll of ,

the additional services that may he furnished by the. carrigy.

We believe that payment for any movement of cargo from

one -pointon the line to another, inéluding, but not limited

to, such ihings as lighterage, switching, backhauling, are

wmounts paid for tra: ‘sportation. Amouis paid for venti-

lation, refrigeration, icing and. salting, are payments fer

those services and not payment for transportation within |

the meaning of Svetion 3475. The above-mentioned services ~«

arenot ite vaded to. be’ all inclusive, but. only illustrative of

the distinction between amounts paid for actual transporta-

tion and amounts paid for additional services. While the

; writer of this’ opinion believes ‘the above should include

de MmUrrage, the majority of -the court believes otherwise.

Thus de qurrage is not, included in the services w hich are

not taxable. N

‘The application of the above construction to the indtant

case results 1 in @ proper tax on sw itching, but an melita!

tax on ieing and salting. j

“> The plaintiff tS entitled to, recdver the’ tax. paid on the

amount paid for icing and salting, with interest as provided ,

by law, and judgment will be epitered accardingly.

The ‘amount of recover y is reserved for further proceed-

ings in accordance with, rule’38 (c) of this court.

M ADDEN, Jud ge;- Wurraker, Judge; Litt.eTos, Judge;

and Jonxts, C hief Judge, concur.

é 6

| ee ite

a. ad

ae Appr ndix A

Finpincs or Fact

The court’ having considered the evidence, the stipula-

tion Of facts entered into by the parties, the report of Com-

tuissioner W, Ney Evans, and the-briet's and argument of

couusel, makes findings of fact as follows:

1. In this action plaintiff, ‘an Hlinois corporation,

to recover $7,246.67 in taxes paid by it during the period

commencing October 1, 1948, and ending December 31; 1044, -

‘in connection with the transportation Of property.

oy]

paid *** * * for the transportation of property by rail * *\*

from one point in the United States to another,”’ and sub-

section fc) of the same section requires that such tax ‘* * * rt

shall be paid by the person gnaking, the, payment subject to

the tax,’’ and that the ‘anrier receiving a payment for the

transportation of property “ * * * shall collect the amount”

of the tax impésed from the person making such payment,

and shall * * * make a return, under oath “* * and pay the

taxes so*eollected to the collector **.*,"

oD. Section 143.12(d) of Regulation 113% issued in 1943

by the Commissioner of Internal Revenue defined ‘*trans-

portation’? as used in seetfon 3475 (ay of the Internal

Revenne*Code of 1939 as follows:

a -

‘1A stipulation of facts filed by the parttes is the basis of findings

1 through 5 herein. The remaining. findings are based upon evi-

dence offered by plaintiff. In their Stipulation the partjes agreed that

this action “arises under a law of Congress,” and that “jurisdiction

of the subject matter is conferred upon this court by section 149] .

(2) or (3) of the Judicial Code,” while “jurisdiction to hea? and

determine this cause at this time is conferred upon this*¢ourt by

section 3772 (a) (2) of the Internal Revenue Code of 1939 and by :

» Section 6532 (a) (1) of the Internal Revenue Code of- 1954."

2 26 U. S. C., § 3475 (1946: Ed.). *

$26 CFR 143.1 (d) (1949 Ed.), ° oe.

seeks.

2. Seetion’ $475 (a) of the Internal “Revenue Code of.

M39* imposes a tax equal to three pereent of the amount

- 20°

: 5 Appendix A

7 *-* The term “transportatl ion’? as, ‘used herein

means -the movement: of property - by : a person en-

eaged in the business of transporting _ for

hire, ineluding interstate, intrastate, and intracity

_ or other local move ements, as well as towing, ferrying, —

switching, ete. In general, it includes. accessorial

services: furnished in connection. with a transporta-.

tion movement, such as loading, unloading, blocking”

and staking, elevation, t ransfer in transit, ventila-

— tion, refrigeration, icing, storage, demurrage, light-

brage, trimming of cargo in vessels, wharfage, han-

dling, feeding and watering of livestock, and similar.

services and facilities. ~

4. (a) During flie period in suit plaintiff shipped meat

avid other of its products and property (some of which was

perishable) to poiits-within the United States’ over the link

of certain carriers by rail. Included in the charges +4

plaintiff by these earriers was an aggregate of $241,555.77.

for refrigeration charges (eonsisting of charges for the fur-

nishing of ice and salt and for switching in connection

therewith) and for demutrage. On the freight. bills pre-

_sented to plaintiff by the carriers, these charges (for re

frigeration and for demurrage) were separated from the

charges for line haul applicable to the transportation of

plaintiff's property; and on each such bill each earrier

added, as a separate item and under the label of transpor-

tation tax, an amount equal ‘to three percent of the total

charge for the line haul rate-plus the hggregate charges for

blectpltoants services and demurrage.

‘Ch, 49. U. §. C.1 (3) (a). | | ,

» ® A.schedule attached to the parties’ stipulation. lists 12 rail car-

riers, together with the tax collected by each on specific charges (also

listed) during the period in suit. Since the figures are not in dis-

pute, details of the schedule are omitted from these findings.

, Appendix A

e | PPENAIL « 2

~(b) Plaintiff payl the sum of $7,246.67 to the carriers as

representing three, percent of the aggregate charges for re-

frigeration and demurrage of $241,555.75. s

lector of Internal Revenue in monthly payments conumenc-

: ing on-or about November 30, 1948, anil e nding on or about

January 31,1950.

(d) No part of the $7,246.67 has-ever been returned to

plaintiff, nor has plaintiff consented to the allowance of a

credit or refund thereof to any carrier, ;

dD. (a) Plaintiff timely filed (on November 6, 1952) with

the appropriate Director of Internal evenue a claim for

the refund of F202 OS," stating the following reasons for

allowance ef the clk im: *

Said carrjers erroneously added a tas of 3% to

said charges and collected from claimant the aggre- ~

gate sum of $7,252.58 as a tax owing by claimant

under Code S ction 3475 (a), and waich amomit said

carriers paid to the Collector of Internal Revenue at

Chicago, Hinois, during the month following the

month in which the carriers collected the same trom

claimant. ©

As Code Section 3475 (a) imposes a tax of 3%

only on. the amount paid for. ‘transportation of

property,’? it was erroneously imposed by the ear-

‘riers on the cost of icing service, and de amurrage,

which is ot a eost ‘for the transportation of prop-

“erty, and consequentiy should be refunded to .the

claimant with interest.

No repayment. of the taxes for which refund is

claimed, or any part thereof, has been made to the

* The discrepancy between $7:252.58 and $7,246.67. is not eX-—

plained. Plaintiff concedes the | latter amount is correct.

mo)

Appendix A

‘claimant by- the colleeting carrier and the claimant

~has not consented to the allowance -of eredit or re

titud to the colecting e: ir Y ier

(hb) The Director of Internal Revente denied: the ¢laim

and duly gave to plaintiff formal notice of ‘the disallow-

ance,! ‘

6. The tax payments which plaintiff seeks by this

action to recover were paid to the several carriérs as three

“pe reent additions to charges for refrigeration services (in-

elading the furnishing and placing of ice and salt and the -

switching of cars incident thereto) and for demurrage. It.

is not established by. the evidence.that any of the demurrage

charges related to vctrigerated ears.*

7. (a) In the course of plaintiff’s) normal business

operations refrigerator cars were (and’ are)® sometimes

initially iced by it as shigper. When this oceurs, no charge

-for icing is made by the carrier, and, there being no charge,

no tax is colle¢ted by the carrier or paid by the shipper!

When the ear is initially iced. by the carrier, how ever » the

charge i is made and the tax added, 4

(b) When a Sebrigerator car is held over and becomes

subject to.a charge for demurrage, any additional ice the

car may need must be furnished by the shipper, in which

event there is no charge for icing by-the carrier and no tax

“thereon is collced or paid. ea Ma,

7.Other dosinnatities. established by the stipulation or- by the evi-,

dence are that there has been no transfer of .this claim.by plaintiff,

and no action on it, other than as stated herein, ‘by the Congress or

any of the departments.

*In this action’ plaintiff chaltenges the validity of the pertinent

regulation (finding 3) insofar as it purports to-include in transporta-

tion such accessorial services as refrigeration (including switching i in-

cidental thereto ), storage, and demurrage.

® This is a test case for similar claims now pending.

a .

Appendix A

ieing and Switching whenever the @arrier furnishes the

service.” While this may or may not oceur when the par is

customarily renders such service while the shipment is en

route. Whenever ‘the carrier’ performs the’ service. and

makes the charge, thé tax of three pereent is added and

collected by the carrier from the shipper.

(d) Ice purch: ised by either the shipper or the carrier

‘for use in railroad dar bunkers has been subjected. to local

sale ‘Ss taxes, + “Gann a im

ConcLustoN or Law

Upon the foregoing findings of facet, which are. made a

part of .the judgment herein,.the court concludes as a

matter of law that the plaintiff is entitled to recover the’

tax paid om the amount paid for ‘jeing and saltitig, with

interest as provided by law, and judgment will be entered

-to that effeet. The amount of recovery will be determinéd

pursuant to rule 38'(e) of the males of this court.

1-The switching ihn is a flat or standard. charge for each:

‘refrigerator car that is serviced at an icing station. ‘It applies

whether or not any switching i is done. Stee

G57

. 4

. Appendix B

peneal IN THE.

- UNITED STATES COURT OF CLAIMS. +

"(Decided March 5, 1958)

{ , No. 85-57

ray

¢ ARMOUR AND Company et al.

eo. ; iy: ae

~~ Tire Usitep States

sad . ; 7 en —

No. 300-57

« ArMoUR anp Company ef al.

we Me

Tre Unitep States

On Puaintirrs’ anp Derenpant’s “Motions For

SuMMary JUDGMENT

-LaraMonre, Judge, delivered the opinion of the court:

‘These are actions brought by eight plaintiffs in one suit —

~ and nine plaintiffs in another for the refund of transporta-

tion taxes. The cases arise on plaintiffs’ and defendant's

motions for summary judgment. 7 p

Two, questions are present: (1). whether the phrase

‘tthe amount paid * * * for the transportation * * * of prop- .

erty’? as used in section 3475 ofthe Internal Revenue Code

of 1939, as amended 26 U.S. C. 3475' (1946 Ex), includes

oo eer

ots:

late ; Ap) seondis BB.

diarges ee the carriers for the supplying of ice and salt in

the bunkers of refrige ‘ration cars, and (2) whether the

period for filing claims for refund of Transportation taxes

begins to ruii from the date the taxes are paid to the carrier

or from the date the carrier files its return and pays the

taxes to the collector of internal] revenue,

The facts, which are undis spute tre these: The plain-

tiffs are nine corporations which ship meat and other prop-

erty owned by them to points within.the United States and

pay transportation taxes to the carriers on ac ‘ount Lhereot,

There was included in the trans sportation charges, ébarges

for icing, salting, switching, and-de miurrage., The taxes on

these items were paid during the period from October 1

throngh Deee mper 31, 1952.

Plaintiffs filed. claims for refund fora part of thre trans-

portation: taxes paid, contending that charges for icing,

salting, and demurrage were not a’ part of the, cost. of

transportation and therefore they were entitled to recover

taxes paid for such services.. The clgims were rejec ted and.

this suit results.)

The first question presented, i.e,, w hethe ricing and salt-

ing aS a part of: transportation: and subject to tax, was

considered.in.the.case of Swift & C ompany Vv. United States;

156 C. Cls, 394, where this court held that the definition of

‘transportation as contained in the regulations of the Com-

missioner of Internal Revenue should not have ineluded

amounts paid for ventilation, refrigeration, icing, amd salt-

ing. On the authority of that case, to which we adhere, .

- plaintiffs’ motion ‘for summary jiilgment is granted and

defendant’s:motion for summary judgment is denied, sub-:

jeet to the restrictions discussed below, regarding the second

question presented, i.¢., that claims for refund are to an

extent barred by the statute of limitations. It i is thedéfend-

‘Plaintiffs in their wistitins have abandoned the tax an demurrage

dis set forth in the claim for refund.

ry , —— y

- . ; wae quite semeie- =,

| . Appendix B.. eee. ;

ant’s position that $14, 630. 43 of the amount Set forth in the

petition is ‘barred by the statute of limitations since the

claims therefor were not.filed within the 4- -year period after

payment. Z

- Section 3313 of the Internal Riedie Code of 1939, F

supre, provides that all ¢laims tor the refunding of any tax

alleged to have been erroneously or illegally assessed or

collected must be presented . to the Commissioner within

four years next after the. payment of: such tax, and the

“amount of the refund shall not exceed the portion of the

tax paid during the four years immediate ly prec eding the

filing of the claim, ~ °

Section 3475 (c) of the Internal Revenue Code of 1939,

“supra, provides that transportation taxes imposed shall be

paid by the person making the payment subject to the tax.

It further provides that the person receiving. any payment

- shall collect the amount of the tax, making a return ‘on or

hetore the last day of each month, and pay the taxes so

collected to the proper collector of internal. revenue.

Plaintiffs contend that the date payment was made by

the carrier to thé collector was the date of payment of the

tax and hence the statute of limitations did not begin to

.run until that date. ° ‘

A consideration of the pertinent statutes leads us to this

conclusion: The carriers. were under duty” imposed by

section 3475 (c) to collect the tax from the shipper. Thus

the earrier syas in effect the agent of the Government and

: received payment as such. “Payment to’ the agent dis- ”

charged the obligation of the taxpayer. as fully’as'if pay-

ment were made directly to the , proper collector of internal -

revenue, since receipt by an agent is regarded as receipt by |

its principal. When plaintiffs paid the transportation

costs, which included the tax thereon, to the carriers, it

~« effectively discharged its obligation, and the time for filing

claim-for refund began on that date. See Eastern Exten-

é %

Sot

mee Appendix B

sion, - pre & Chita Telegraph Co., Lid. y. United +.

States, 251 U. S. 355. oe:

It folow! s that all taxes paid by plaintiffs mote than four

; years prior to the filing of claims for refund are barred by

B..- the statute of Hmitations, supra. Piaintiffs’ motion for

summary judgment is granted in part and denied in ajith

_ and defendant’s cross- motion for summary judgment --i

~f— grarited in part and denied in part. i hd

: Judgment will be entered for plaintiffs together with

| _ interest as provided by law. The amount of recov ery will |

he dete ‘rmined pursuant to Rule 38 (c) of the Rules of this _

. court.

" It'is so prdeved:

- &

a . fies

MADDEN, Judge; LittLETon, Judge; and JONEs, Chief

Judge; concur. : i

W HITAKER, buitpe: took no part in the consideration and

de ‘cision of this case (sick).

IN THE”

ee NITED STATES cou RT. OF C LAIMS-

(Decided January. iy 1959) ”

, @

sel Oo

. Vv

ARMOUR AND COMPANY, ET AL., Od

Ss oy

-Tre Usiten States.

a A

No. 876-57 ia

ANbERSON Foop Processtnc Co. ET AL.,

ae Tue Unitep STATES.

a 0 ‘ :

\ -

On PLAINTIFFS’ Motions ror SumMARY JUDGMENT-AND JU DG-*

MENT ON THE PLEADINGS AND DEFENDANT’ Ss Motions FOR

_SumMMaRY eve MENT

M ADDEN, Suita’ <n the opinion of the sear:

This i is a suit for ee of transportation taxes paid, hoy

the plaintiffs-to severak common carriers, the fatter acting

‘as collectors for the Unit! States which received the taxes

in due course.. The. taxes\sought ta be recovered related,.

tq the carrier’s charges, not, for the line Naul transporta-

‘tion of the plaintiff’s goods; “hut for so-called accessorial

- services furnished by the earricy, those services being the

icing and salting of refrigerator ears , the heating. of cars

to protect the contents from freeziug, and the ‘unloading,

. of ears. ee \ ‘

on Appendix C pies Pa ; :

No. 54457 0 ae ; Ce 1

vanes

ne ep ete 99 -

——

Appendiv C.

This court, has decided. in the cases of Sw ift dé Cc ompany

. Enited. States, 136 €. CIs. 3! r4, amd.int Armour Com-

pany Vv. United States, Nos.85-37 and 300-57 decided Afareh

5,.1958, that the transportation’ tax was not applicable se

charges for icing and salting. %Phe instant cases present

the same prob lem. The. Government urges that our prior

_ decisions were erroneous, and assumes at least a: part, of.

tly: responstbility for or error by canfessing that its briefs

‘in the prior cases were nol as comp ete as thes sheuld have

° s

‘been. - mg |

Upon le ration of the qués ion, we have concluded

that our prior decisions were erroneous, j

, . The statute, which was section 3475. of the: Internal

Revenue Céde of 1939, 26 &:C., 1952 ed. 8475 2, and section

4271 of the Internal Revenue Code of 1954, 26°U. S.C. , 1952

_ vd, Supp. IT] 4271, imposed a tax of 3 per centum aie the

amount paid for ‘the transportation of property by rail,

anotor. vehicle,: water, or air, Its text: ‘does nat further

- culighten Us as to our SS Section S472 of: the® hie

ternal Revenue Code of 1939, 26 U. $. Cy 1952 ed. 3472, pro-

vide d that the Comnifssioner of Tatornal Revenue, with

the approval of the Secret tary of the Treasury, should pre:

seribe and publish all needful rules arid regulations for

- . the enforeement of seetion 3475 ‘and the other sections in

that chapter of the Code. ° faded 2 As rg

. Treasury Regulations 113° (1943 eda.) in. its seetion

143.1 (al). defined the word ‘‘transportation’’ as including,

among-miany: other named ‘“aceessorial services furnished. -

Jn connection with a: ‘transportation moy enient,’ ie unloading, °

refrigeration and icing,

Section 500 of. the Revenue ka of 1917, 40 Stat. 300,

provided for a transportation tax essentially identical to —

that«pfovided in the 1939 and 1954 Codes, Section 500 of »

the Revenue Act of. 1918, 40 Stat. 1057, didtikewise, Treas-

ury Régulations 49 (1919 ed. yin its Article 2 defined “trans:

- %

30°

ans ( hee he Appendix C. Artes ge

: portation’’ as including, among many other sefvices in con-,

_ nee tion with the movement of goods by # carrier, refrigera-'

tion and icing, This World War I transportation tax Was

repéated by section ses of the Revenue Act of 1921, 42

Stat. 227. .

~~ We have, the ny % statute ‘enact ted as a revenue raising

-measure during the First W orld War, interpreted by regu-

lation, and, after the war, repealed ; a substantially iden-

.ticak statute enacted: in 1942, and a.regulation issued in

terms substantially identical with the one issued to inter-

pret the earlier. statute; the reendetment of the statute in

1954, and the cvritinuation of the regi@ytion. Since the

regulation expressly makes ‘the «tax applicable’ to the

charges here in question, the plaintiffs, in order to’ pre-

vail, must stiec essfully attack the Mgulation. Their task is

a- formidable one. The Supreme Court _ in Commtis-

sioner v. South Texas Co ++ 833 U.S. 496; 501:

This, Court has many times Dechnoead that Treas- .

ury regulations must be sustained unless unreason- |

able amd plainly inconsistent with the revenue stat-

utes and that they constitute contemporaneous con-

structions by those charged with administration of

these statutes w hich should not be pverralea except

‘for weighty reasons. See, ¢. g., Faweus Machine Co.

¥; United States, 282 U.S. 375, 378. -

‘Seetion 1 of the Interstate Commerce Act, 24 Stai: 379,

ot amended in ‘1906, 34 Stat. O84, 49 U.S. C., 1952 ed.” 1,

td read as follows: Care

* * * the term ‘‘transpor tation’’ sliall include ears

‘and other. vehicles and all instrumentalities and

_ facilities of shipmient or carriage * * * and all serv-

ices in connection with the _recéipt, delivery, eleva-

‘tion, and transfer in transit, ventilation, refrigera-

tion or icing, storage, and handling of the ' Property

transported,

‘

“3 A ppehdix e

Congress, having itself defined theterm ‘“transporta=. —,

tion”, We see no reason to suppose that in imposing a tax

on charges: “paid for transor ‘tation it meant*.to exempt

from -the tax the charge ‘for a considerable number of the:

services Which. it itself had defined as being a part of trans-

portation, _ : : wre A

The Goyerninent presents as ‘exhibits numerous tar ina

motor ‘carriers, rail barge export.earriers, rail and: Tail-

motor import-export carriers, rail carriers carrying less

than carload lots, and ‘piggy hack’*-carriers by rail of,

-truck trailers which prov ide that the tarifffates include the

cost of refrigeration, icing, ventilebion; hes ating and similar

services.. In freight bills made up from these tariffs it is

not passible to dissect out the charges for the aceéssorial

of the freight bill. The consequenée of the plaintiff's cond

tention would bea seriaus diserimination agi lust the users:

_Ofservices covered by those tariffs. - ; Piers

We have seen the opinionof Judge Roche of the United

‘States ‘District Court. for the Northern District of. Cati-

forifia, filed October 21, 1958, in the case of Edward A,

Beher, et als: ve U nitéd States , No. 36894 in Which Judge

Roche: ecu? follow oursearlier decisions on the ques; |

tidu here invo#¥ed. We think Judge Roche was right.

We conclude that the plaintiffs were properly tax¢d and

have no right to-recover. The defendant's motions for

summary judgment are granted,- plaintiffs’ motions -are

denied and the plaintiffs” petitions are dismissed. ;

It-is so ordered. + s he

Ww HITAKER, Jailed and Jones, Chief Judge, concur.

Laramore, Judge, disseits. for the refisons Stated in

Swift & Company v. United States, 136 . Cls. 394.

. ; ie +

i et “Appendix ag .

UNITED. STATES COURT OF e LAINS

e 2... (

P No. 376-57

gS ° , ;

CASveERSON Foo | ROCESSING C'O., et al,

. : oo ; : ‘

. ® a

Tue Unxrven States

} : .

No, 44-57

‘ . Armour anp ( ‘OMPANY, et al,

—V\ —

Tue Unxirep States

fy ' .

~ --Clerte's Office.

Washing on, D. C.,April 8, 1959

Fo Attorney of Record dud. Assist ant Attorney sieatas on

Land Commissioner :

Sirs:

Please take'notiee that in the above-entitled eause there

has been entered. this day on the plaintiff's motion for

re ‘he anne the following: order: Overruled,

‘Very truly yours,

‘Witiarp L, Hart, «

ee + Clerk, Court of Claims .

’

mk _ Appendix E

IN — :

NITED STATES COURT OF CLAIMS -

"No. 357-17

e . ‘

~Caprron Pacnwiwe Company, et al.

P saw ° . *

—Vi— .

THe Uyrrep ‘States

a“

—f- o— ———_———_- —

eo. . ORDER *

.. This case comes before the court ‘on plaintiffs’ and

‘defendant's motions far summary judgment, together with

the respective responses, Upon consideration thereof, and’

on the basis of the opinion rendered this. date in Armour.

and Company, et al. vy. United. States, No. 544-57,

‘It - ORDERED this fourteenth day of January, 1959, that.

defendant's motion for summary judgment be and the same

is granted and that plaintiffs’ motion for summary judg-

ment be“and the same ts denied, and plaintiffs? petition is

dismissed,’ a , ‘

By the Court, oe

‘e ‘ Marvin JONES,

Chief Judae

se Appendix F ;

UNITED STATES COURT OF CLAIMS

No. 357-57

reenter enemas mes

Carrron Packing Company, ot al.

—_\)

Tue Unrreo States

nr (a

Clerk's Office

. Washington, D.C » Aprils 8 1959

To Attorne y of ‘Boned wid pre? tant Aflorne Vf General,

and Commissioner °

Sirs:

Please take notice. that in the above-entitled cause there

has been entered this day on the plaintiff's motion to alter

or amend the judgme nt the following order:

Ov, -rruled,

/ .

Very truly yours, pape

Witiarp L. Harr

Clerk, Cuurt of Claims

. = 7

. : .

. . =

. ° 3 :

- .

a -

. ‘ :

‘ .

. 4 ;

. .

‘ ee * is

. e ? ‘

i Fs

6 ‘

Qe ~

“a & :

; .

F °

‘ e x _ .

* .

P ‘

P .

. . :

- {

’ : 7

. - . :

‘ 4

J ‘ %

- ‘

i , .

: ‘

” 2 ©

: °

* ¥ ss ¥ ‘

’

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.