RAILROAD COMPANY
v.
UNITED STATES.
Supreme Court of United States.
*548 Mr. John W. Cary for the plaintiff in error.
The Solicitor-General, contra.
MR. CHIEF JUSTICE WAITE delivered the opinion of the court.
The different assignments of error in this case will be considered in their order.
1. As to the claim for a credit of $3,866.66 on account of taxes erroneously assessed and collected, Nov. 7, 1865.
Sect. 951 of the Revised Statutes provides that "in suits brought by the United States against individuals, no claim for a credit shall be admitted upon trial, except such as appear to have been presented to the accounting officers of the treasury, for their examination, and to have been by them disallowed in whole or in part," save under certain circumstances not material to this case. Sect. 3220 of the Revised Statutes authorizes the Commissioner of Internal Revenue, "on appeal to him made, to remit, refund, and pay back all taxes ... that appear to be unjustly assessed, or excessive in amount, or in any manner wrongfully collected."
It does not appear that this claim was ever presented to the accounting officers of the treasury for allowance, on appeal or otherwise, or that it has ever been disallowed. For this reason, *549 notwithstanding its apparent equity, the credit was properly refused in this suit. Halliburton v. United States, 13 Wall. 63; United States v. Giles, 9 Cranch, 212.
2. As to the tax of two and a half per cent on the amount received for the transportation of mails between July 1, 1866, and Jan. 1, 1870.
By the act of July 13, 1866 (14 Stat. 135, sect. 103 of the act of 1864 as amended), "every ... corporation owning ... any railroad ... engaged or employed in ... transporting the mails of the United States upon contracts made prior to Aug. 1, 1866, shall be subject to and pay a tax of two and one half per cent of the gross receipts" from such service.
No express contract for carrying the mails was proven, but since the service for which the compensation was paid began before August 1, and was continued without interruption for the whole term in question, the court below implied a contract prior to that time. This, we think, was right. Had payment been refused and suit brought against the United States in the Court of Claims, to recover for the service rendered, there could be no doubt about the right to recover, notwithstanding the jurisdiction of that court is confined to suits on contracts (Salomon v. United States, 19 Wall. 17); and this not alone because the service had been rendered, but because it is to be presumed that when the company commenced the transportation it had been agreed that payment should be made for what was done.
3. As to whether taxes are payable on interest falling due Aug. 1, 1870, at the rate of five per cent or two and a half per cent.
The ruling of the court below on this point was in accordance with our decisions in Stockdale v. Insurance Companies, (20 Wall. 323), and Railroad Company v. Rose, 95 U.S. 78.
4. As to the tax on interest due and payable Feb. 1, 1872.
The act of 1870 (16 Stat. 260, sect. 15) provided "that there shall be levied and collected for and during the year 1871 a tax of two and one half per centum on the amount of all interest or coupons paid on bonds or other evidences of debt issued and payable in one or more years after date, by any" railroad company, "and on the amount of all dividends of *550 earnings, income, or gains hereafter declared," "whenever and wherever the same shall be payable, ... and on all undivided profits ... which have accrued and been earned and added to any surplus, contingent, or other fund."
The interest in this case was neither payable nor paid in 1871, and as the tax is not leviable or collectible until the interest is payable, we see no way in which the company can be charged on this account. The tax is not on the interest as it accrues, but when it is paid. No provision is made for a pro rata distribution of the burden over the time the interest is accumulating, and as the tax can only be levied for and during the year 1871, we think, if the interest is in good faith not payable in that year, the tax is not demandable, either in whole or in part.
There is no question here of earnings, for the finding is not as to what was earned by the company during the year 1871, but as to what was paid in 1872 on account of interest then for the first time falling due. We are aware that at the present term we held, in Railroad Company v. Collector (100 U.S. 595), that the tax levied under the act now in question was essentially a tax on the business of the corporation, and that in order to secure its payment it was laid on the subjects to which the earnings were to be applied in the usual course of business; but as this tax could not be levied until 1872, and there is no finding of any earnings in 1871, we see nothing to be taxed under that rule. In Barnes v. Railroad Companies (17 Wall. 309) it appeared expressly that the dividends were declared out of the earnings of 1869.
It follows that to the extent of $1,092.16, and the interest
thereon, the judgment below was wrong, but in all other
respects right. Consequently the judgment below will be
reversed, and the cause remanded with instructions to enter a
judgment against the railroad company for . . . . . $5,933.70
Less . . . . . . . . . . . . . . . . . . . . . . . 1,092.18
_________
Equal to . . . . . . . . . . . . . . . . . . . . . $4,841.54
And interest thereon at six per cent from March 1, 1872.
So ordered.