diction in the officers assessing or collecting, or any other illegality, or from any error committed by any of the officers intrusted with the assessment and collection of the tax, he is entitled to recover. The theory on which the recovery was based in State taxation and under the customs laws was the same, that the collector had in his hands money of the plaintiff, illegally exacted, and the law raised an implied promise to repay. But the Supreme Court of the United States repudiate this theory as to internal revenue, and place it upon the ground that the internal revenue acts warrant the conclusion as a necessary implication, that Congress intended to give the tax-payer such a remedy.1 The only provisions that bear especially on that subject are the statute just referred to, limiting the conditions on which suit may be brought, and the statute authorizing the commissioner to repay to the collector such sums as may be recovered against him for internal revenue taxes collected by him, together with the statute requiring the collector to pay daily into the treasury, or some government depository, all sums collected by him. Is it not an implied promise after all? Before these statutes, and, in the case of customs, before the statute requiring the collectors of ports to pay into the treasury the money received for duties, notwithstanding protest, the promise was raised upon common-law principles; now, if it is a necessary implication from the statute that the party shall sue, the promise is implied from the statute. In this species of taxation, as in those heretofore considered, the assessment, if regular on its face, protects the collector, and if the tax is paid voluntarily, although it may be erroneous or illegal, the taxpayer cannot sue the collector. But it is not necessary, as in customs duties, that the protest should be in writing. If the party objects, and the collector understands that the taxes are regarded as illegal or erroneous, and that suit will be brought to recover them, it is sufficient, and the amount so paid may be recovered.5 Under the acts of 1861 and 1868, the period of limitation, both as to the six months which the commissioner might delay his decision, and as to the time in which the suit might be brought after his decision, began to run from the date of the appeal taken. The construction given to those acts was that this period was the time when the papers in reference to the appeal were filed in the office of the commissioner, not the time when they were filed with the collector for 1 Collector v. Hubbard, 12 Wall. 1, 12. 3 R. S. U. S. § 3210. 2 R. S. U. S. § 3220. 4 Erskine v. Hohnback, 14 Wall. 613. 5 Erskine v. Van Arnsdale, 15 Wall. 75; Haffin v. Mason, 15 Wall. 671. his certificate. Now, by the Revised Statutes, the same period is fixed upon for the beginning of the six months delay, but the period when the statute begins to run for suit brought, or appeal taken for refunding or abatement, is when the cause of action arose. This period is the time when the money is paid contrary to law. The statute under consideration, prohibiting suit against the collector, is intended to prevent any interference with or obstruction of the officers in the regular administration of the law. Although the tax is illegal or erroneous, it is first to be paid, then the commissioner is to have an opportunity to correct it before suit can be brought. But if the collector clearly exceeds his authority, and does acts not warranted by his precept, he is a trespasser, and the statute does not apply. It may be difficult to draw the distinction, but the authorities sustain the position. Where there is a clear case of no jurisdiction in the assessor, even, he is liable in trespass although not liable in assumpsit.3 Rights of the Tax-payer when Suit is brought against him.— When suit is brought on the bond of a distiller to recover the taxes due, can he show that the assessment is erroneous, or must he pursue the same course as if he had brought suit to recover the amount unlawfully exacted from him? In a well considered case in the second circuit, the view is taken that in all cases the distiller must pay and appeal, and that when the government seeks to enforce payment, the same reasons of policy exist for regarding the assessment as conclusive for the purposes of that suit as when suit is brought by the taxpayer. It is not conclusive because its correctness cannot be inquired into anywhere or at any time, but because Congress has prohibited its correctness from being inquired into until after payment has been made. It is conclusive for the purpose of collecting the tax. An additional reason for the assessment being regarded as conclusive, is that it is to a certain extent judicial, and should not be attacked collaterally. This is in accord with the doctrine in the State courts on that subject. Where suit is allowed to be brought for the collection of taxes, the assessment is conclusive until corrected in the mode pointed out by the statute.5 This precise question was before the Supreme Court of the United 1 Cotton Press Co. v. Collector, 1 Woods, 296. 2 Erskine v. Hohnback, 14 Wall. 613; Pullan v. Kinsinger, 2 Abb. C. C. 94. 3 The Assessor v. Osbornes, 9 Wall. 567, 572. 4 United States v. Black, 11 Blatch. C. C. 538; United States v. Hodson, 14 Int. Rev. Rec. 100. States in Clinkenbeard v. United States,' when the court was divided five to four, the majority holding that the statute requiring a taxpayer to appeal before he could sue, did not apply where the government brought suit, and that in the latter case the government must show, in order to entitle it to recover, that it is legally entitled to the amount of the tax claimed; and while they recognized the doctrine that the assessment is of a judicial character, not to be questioned collaterally, it was regarded as not applying to the case at bar, which was to be classed with cases where the assessment was of persons, property or operations not taxable, which would make the tax not merely erroneous but illegal. The minority thought the evidence showed mere error in the assessment, and that the requirements of the statute as to the appeal, applied when the government sued as well as when the tax-payer brought suit. While the doctrine that the statute does not require an appeal, and the assessment is not conclusive in a suit brought by the government, where the tax is illegal, seems to be that which is to prevail in the Supreme Court of the United States, no case yet has asserted the doctrine that the assessment is not conclusive for all purposes where there is mere error. Collection of Taxes on Distilled Spirits, Malt Liquors, Tobacco, Snuff and Cigars-Lien for the Tax.-The tax on the actual product is paid by stamps where the articles are removed from the place of manufacture, but the deficiency assessments made on capacity, or on articles removed without payment of the tax, go into the hands of the collector to be collected as other taxes; but in each of these cases the bond given before entering into business, requires the tax to be paid, and if there is default made in its payment, suit may be brought against the principal and his sureties for the tax unpaid. By the general provisions on the subject, the United States has a lien on all the property of the tax-payer from the time default is made in the payment of the tax, and here there must be demand before the lien accrues. But in the case of distilled spirits there is a more specific and unconditional lien for the tax on such spirits. It is a first lien on the spirits distilled, the distillery, all its fixtures and apparatus, and the lot of land on which it stands. Literally, this statute would give a first lien on distilled spirits after they left the warehouse prop 121 Wall. 65. 2 United States v. Miller, 5 Biss. 128. A similar defense was allowed to a suit on a distiller's bond in United States v. Ferrary, 22 Int. Rev. Rec. 394, Supm. Ct. U. S. October Term, 1876. 3 R. S. U. S. §§ 3260, 3336, 3355, 3387. 5 R. S. U. S. § 3251. 'R. S. U. S. § 3186. erly stamped, and were in the hands of a bona fide purchaser. It cannot, however, be intended that a deficiency tax should be a lien on spirits which have paid the tax on the quantity in the cask, and carry on them the evidence of the payment under the signature of the revenue officers, for such is the tax paid stamp. The only lien, it seems to me, that could be continued on the spirits, would be that for the tax on the quantity in the cask, and the lien for the deficiency tax must be confined to the spirits on the premises, the property of the distiller. ment. This statute was construed where there was a seizure and condemnation of distillery premises and distilled spirits, and a sale thereof under an order of the court. After the sale a bill was filed under the statute against the purchaser, claiming a lien on the spirits and other property sold, for the taxes due on the spirits. The statute giving the lien must be taken in connection with the proceedings of condemnation and sale. The property had been forfeited to the United States, and was sold as the property of the United States. The order might have directed the sale subject to the lien for taxes, but it did not, and the government was held estopped from setting up a claim for taxes, against the purchaser, in existence and known at the time.1 Collectors. They are required to pay the gross amount of all taxes and revenues received daily into the treasury without abateA certificate of such deposit, signed by the treasurer or any officer of a designated depository of the United States, is to be transmitted to the commissioner of internal revenue daily. He is charged with all lists transmitted to him by the commissioner, or other collectors, or delivered to him by his predecessor in office, and with all moneys collected for penalties, fees or costs, and credited with all lawful payments made by him. If he is in default at any time, payment is compelled in a most summary mode. The solicitor of the treasury issues a distress warrant for the amount due, directed to the marshal of the district, who levies upon and sells goods and chattels of the collector in five days. If the sale of the goods and chattels does not raise an amount sufficient to satisfy the warrant, then it may be levied on the real estate of the collector, which may be sold at public auction after three weeks' notice, in not less than three public places in the collection district, and in one newspaper in the county 1 United States v. Mackay, 2 Dillon, 299. Where property is sold under distress for taxes, the taxes are first paid out of the proceeds (R. S. U. S. § 3191), and distilled spirits are sold under order of court subject to tax. R. S. U. S. §3334. 3 R. S. U. S. § 3218. R. S. U. S. § 3210. or collection district. The marshal gives the purchaser a deed which vests him with such title as the collector had at the time of the seizure thereof. Such a proceeding is not depriving a person of property without "due process of law," but to vest a good title as to the real estate, it must be strictly followed, and the deed should. show that every step required by the statute has been taken. § 174. Forfeitures Relating to Distilled Spirits, §§ 3281, 3299Bona fide Purchasers, &c.-The various stringent regulations concerning especially the occupations which are under the surveillance of the government, are enforced by a multitude of penal provisions. The violations of some of these regulations are made felonies punishable by fine and imprisonment, others are mere misdemeanors punishable in the same way. At other times their violation is punished simply by a fine, or penalty as it is usually styled. Often in connection with these punishments there is another, the forfeiture. This applies to the property which is the subject of tax, to that used in the manufacture of the article, to the land on which the factory stands, and even to personal property on the premises where the business is carried on. And as the title to the property forfeited to the government relates back to the time the act was committed which creates the forfeiture, rather than to the time of seizure, third parties who may be purchasers for value of such property, are as much interested in these questions as the persons whose duty it is to pay the tax. I do not propose to consider all the cases of violations of the revenue laws, but only the most prominent ones. Forfeiture under § 3781.-There are two offenses under this statute. 1. The first is that of carrying on the business of a distiller without giving a bond. This offense is one so easily proved that it is rare that any question is raised as to it. 2. The second offense is that of engaging in the business of a distiller with the intent to defraud the United States of the tax on distilled spirits, distilled by him. Each of these offenses is punished as a misdemeanor, by fine in a sum from $1,000 to $5,000 and imprisonment from six months to two years. There is attached to each the additional punishment of forfeiture of: (a) all right, title and interest of the distiller in the tract of land on which the distillery is situated; (b) all right and title of every person who knowingly has suffered or permitted the business of a distiller to be carried on, or has connived at the same; (c) distilled spirits or wines, and all stills or other apparatus fit or intended. for distillation, rectification, or compounding of liquors, owned by 1 Murray's Lessee v. Hoboken Land & Improvement Co. 18 How. 272. |