Dalton Foundries, Inc. v. United States

GREEN, Judge. Plaintiff is a corporation which prior to December 13, 1924, was doing business under the name of the Dalton Malleable Castings Company, a corporation, which had about January 1, 1924, acquired the properties of the Sunderland Company, also a corporation. All three of these corporations were engaged in the business of manufacturing and selling air pumps. This is a border line ease on account of the indefinite nature of the evidence. The tax was assessed upon these tire pumps on the ground that they were automobile accessories. This the plaintiff denies, and thus raises the sole issue in the case. There is no evidence as to what use Was actually made of any of these pumps, but the burden of proof is upon the plaintiff to show that they were not primarily adapted or specially designed-for use upon automobiles and sold as such. The evidence shows that they were equally adapted and largely used for a number of other purposes besides that of inflating automobile tires. It also tends to show that the pump usually carried in connection with an automobile was somewhat smaller and cost less. The pumps were sold to jobbers generally and small dealers, also in large quantities to mail order houses like Montgomery Ward & Co. While the evidence is not as definite as it might be, we are justified in concluding that they were sold as articles of general merchandise without any statement by the purchasers as to what purpose they were fitted or for which they could be used; and no statement was made except in one instance where it appears from a part of a catalog that the pump, or a pump, manufactured by the Sunderland Company was described as “Sunderland’s Tire Pump,” with a special description in certain particulars as to size, appearance, and material. As we have hereinafter held that no recovery can be had on account of taxes paid by,the Sunderland Company, it is not necessary to consider the effect of this circular. All of the tire pumps in controversy were supplied with standard valve connections which enabled them to be used in connection with a number of different kinds' of apparatus as above stated. Considering all of the testimony, we think the weight of the evidence shows that the tire pumps in question were commercial articles which, as stated in Universal Battery Co. v. United States, 281 U. S. 580, 50 S. Ct. 422, 423, 74 L. Ed. 1051, “ordinarily would be sold for general use” arid were not “primarily adapted for use as a component part” of an automobile, and also that they were not “specially designed, manufactured, and sold for use on automobiles,” but on the contrary were equally adapted to many other uses. See supplemental opinion in Anthony Co. v. [487] United States, 56 F.(2d) 481, this day rendered by the court. The government sets up the further defense that the plaintiff cannot recover on the taxes paid by the Sunderland Company for the reason that it bought the assets of that company, including the claim which that company had for the refund of taxes, and that the transaction amounted to an assignment or transfer of the claim, which is void under section 3477 of the Revised Statutes. (31 USCA § 203). The testimony with reference to the manner in which the plaintiff acquired the claim of the Sunderland Company for a refund is very meager, and simply shows that the plaintiff at a certain date acquired all the assets of the Sunderland Company by virtue of a written contract, but the contract is not set out in evidence. We think we would be justified in concluding that the Dalton Company purchased the assets of the Sunderland Company and that the purchase included the claim against the government, which is now in suit on account of taxes paid by the Sunderland Company. Such a transaction would amount to an assignment or transfer of the claim of the Sunderland Company, which would be invalid under the statute. In any event the burden of proof is upon the plaintiff to show how it acquired the claim of the Sunderland Company in order that the court can determine whether it is in a position to maintain suit thereon, or, in other words, whether it has a valid claim against the defendant upon which suit may be brought under the statute. The testimony is entirely lacking on this point. It might also be said that it is conceded by plaintiff that all taxes paid by any of the three companies on or before April 25, 1923, are barred by the statute of limitations, and only a small part of the taxes paid by the Sunder-land Company were paid subsequent to that period. There were three claims for refund filed in the case: The first claim was for taxes paid from November, 1920, to May, 1921, which is obviously barred. The second claim was filed October 25, 1923, for $6,915.07 for taxes paid from June, 1921, to June, 1928. This was a claim filed by the Sunder-land Company upon which we have held no recovery can be had. The third claim was filed about August 12, 1926, for a refund of $5,607.21 of taxes paid from August, 1923, to February, 1926. The stipulation filed by the parties and made part of the findings does not accord with the statement made in the third claim as to taxes paid by the Dalton Malleable Castings Company and the plaintiff. In fact, this claim appears to include some taxes paid by the Sunderland Company and also differs somewhat in amounts from what is stated in the stipulation and findings. An erroneous statement as to the amount of the payments we think would not affect plaintiff's right to recover for the amount actually paid by the Dalton Malleable Castings Company and the plaintiff; nor do we think the fact that the plaintiff only claimed $5,607.21 affects its right to recover more upon payments which were actually set out in its claim and upon which it asked for such greater amount as was “legally refundable.” The payments made by the Dalton Malleable 'Castings Company and plaintiff, amounting in the aggregate to $6,026.18, and the date when each payment was made are set out in finding 3, which sum plaintiff is entitled to recover with interest at 6 per cent, per annum from the respective dates of payment, as provided by law. Judgment will be rendered accordingly.