Cappellini v. Commissioner

SterNhageN,

concurring: It seems to me that the idea preventing petitioner from attacking the system which he invokes is not to be restricted by the standards of estoppel, waiver, or jurisdiction, but is rather a rule which has been recognized by the Supreme Court for its own sake. If Great Falls v. Attorney General, 124 U. S. 581; Daniels v. Tearney, 102 U. S. 415; Grand Rapids v. Osborn, 193 U. S. 17; Wall v. Parrot, 244 U. S. 407, were alone on the subject, they might be distinguished by elements of equitable estoppel which are not present here. But as the principle was applied in the Booth Fisheries case, 271 U. S. 208, it became broader than one of ordinary estoppel. When the court said in In re Fassett, 142 U. S. 479, that, had the petitioner proceeded before the Board of General Appraisers under the Customs Administrative Act of 1890, he would have submitted to the authority of the Board and thus admitted the very proposition he sought to litigate, it was laying down a rule upon which its ultimate decision was made largely to depend. In De Lima v. Bidwell, 182 U. S. 1, 174, it stood by the rule, and Mr. Justice Holmes in Merchants Heat & Light Co. v. Clow & Sons, 204 U. S. 286, took it as sufficiently general to be applicable to a question of jurisdiction founded on improper removal to a Federal court. In that case, irrespective of its possible original limits, the rule was said to be that one who as an actor invokes jurisdiction submits to it.

Thus it seems to me that, upon the commonly accepted doctrine that jurisdiction of a special tribunal can not be assumed and must always be inquired into, there has been engrafted the exception of the foregoing line of cases, the boundaries of which are yet to be clearly drawn. I think that the instant case is similar enough to those above cited to require the same treatment. This does not mean that in any case one who proceeds before the Board must forgo all constitutional questions. It may well be that he may invoke the Board to set aside a levy which the Constitution forbids, such for example as an unapportioned direct tax. But that is different from the anomaly of invoking the system or machinery provided for him and yet complaining of its existence.

*1279That the petitioner came to the Board of his own volition and thus exercised a real election seems clear. In choosing the Board as the theatre of his contest, he saved possession of his funds until the Commissioner had, under section 602, Revenue Act of 1928, sustained the burden of proving his liability. He might, instead, have stood on his idea that the Commissioner’s determination was unconstitutional, refused to pay, and sought, as did the Owensboro Ditcher & Grader Co. (18 Fed. (2d) 798), to arm his resistance with an injunction. If section 604, Revenue Act of. 1928, were raised against him, he might have attacked its validity. Failing that, (as in Felland v. Wilkinson, decided November 22, 1928, U. S. Dist. Ct., W. Dist. Wis.) he might still pay the Commissioner’s demand under protest,' allege duress, and sue at law for recovery, setting up his points of unconstitutionality. This was, in my opinion, a substantial election, and he must be required to accept the limitations of the course he has chosen. He must submit to the Board the issue of his liability as a transferee and its measure, the burden of proof being on respondent and both parties having the aid of the proper powers of the Board through subpoena or otherwise to secure the available evidence.

It may be that, either because of the limited powers of the Board or because of the limited powers of the parties, practical or legal, the disposition will fall short of what some of my colleagues regard as complete or perfect justice. Perhaps it is less roundly efficient and final than some would desire. But this seems to.me to go to the wisdom of the legislation, or to the wisdom of a transferee in choosing to come to the Board. Even courts of equity are not instruments of perfection. They only strive for justice within the limits of their powers. If interested persons or some of the subject matter are beyond the reach of their jurisdiction, they may act on what they have. Here the Board must do likewise, and the petitioner is fortunate enough to escape the burden of proof. I take it that the difficulties which may be encountered in the administration of the statutory method are alone no test of its validity and do not improve the standing of the petitioner to rajse the question. A statute is not unconstitutional because it is hard to apply. But in this case the facts are all stipulated, and whatever difficulty there is rests in finding and applying the law — a problem which inheres, in one form or another, in all our cases. Whatever may be the weaknesses of the Board’s equipment under the statute, it must use it as best it can, and the petitioner, having chosen it, must abide by the consequences of his choice.

But it is, urged that this imposes upon the Board a power to determine liability at law or in equity and so bestows judicial power *1280upon the executive in contravention of the Constitution. To this there are several answers. That the petitioner can not be heard to raise the question has already been demonstrated by one line of reason and authority. In addition to this, it may be asked wherein his constitutional rights are invaded so as to give him a token of right to complain? Such judicial function as the Board exercises is at petitioner’s instigation, and represents not an enforced substitute for the courts, but an elective supplement. No hearing is denied him in a court of first instance unless he chooses to have it so; and even then, after having exercised his right to a full hearing before the Board, he may have a judicial review in the Circuit Court of Appeals. All this, before anything is taken from him to pay what seems to be a clear liability to some extent. As to him the question whether judicial power has been unlawfully bestowed on the executive is academic, and he has no right to raise it here. See United Fuel Gas Co. v. Kentucky, 278 U. S. 300.

Furthermore, it seems to me that petitioner has due process of law, when under the statute he has a choice of proceeding either in court or in the Board, and when, before the Board, he has notice and opportunity to be heard with judicial review before anything is taken from him. This is esxDecially so when the procedure set up and of which he avails himself is incidental to the taxing power. To say that the amount is not a “ tax ” stops short of the essence. It is clearly an amount which the Government claims as part of the revenues derived through the levy of the income tax. Congress has broad powers to prescribe the methods of collection by which its revenues shall be brought to the Treasury, and if it believed this method necessary or wise to prevent the escape of revenue or to facilitate collection, I find nothing in the Constitution which requires the Board, at the instance of this petitioner, to say it may not prescribe it or to frustrate its use. The method is new and goes further than any previous method, but that alone does not invalidate it, and it has not been demonstrated that it goes so far as to stretch the tax-collecting power beyond constitutional limits. It is still part of the “system of corrective justice” approved in Snyder v. Marks, 109 U. S. 189.