PRACTICE AND PROCEDURE-Continued.
See also Contracts, XV; Evidence; Res Adjudicata; Taxes, I, VII, XVII, XVIII, XXXVI.
PROHIBITION ACT.
See Taxes, X.
See Contracts, IV (1), XV; Evidence; Patents (1); Pay, X; Postal Service, I; Practice and Procedure, I; Taxes, VII, XVII, XXIII.
See Estoppel; Res Adjudicata; Settlement Contracts, I (1), III, IV; Statute of Limitations, II (2).
A dismissal by this court on motion of plaintiff and upon a show- ing that all matters involved in suit had been fully settled by the parties thereto is res adjudicata as to the claim sued on, the judgment is not invalidated by reason of lack of authority on the part of plaintiff to make the settlement or to move dismissal, and a demurrer on the ground of res adjudicata, interposed in a second suit covering the same subject matter, must be sustained. Second National Bank of Saginaw, trustee, 166.
See also Jurisdiction, IV; Patents, (1). RESERVATION OF SUIT.
See Estoppel.
SALARY.
See Pay, VII.
SALE OF SUPPLIES.
Sale "as is"; inspection as a condition of sale; failure to inspect. Shapiro & Co., 424.
Plaintiff agreed in writing to salvage a Navy water barge, the Government to pay “actual expenses of operation whether successful or not, * provided expenses paid will not be in excess of $35,000." In the course of operations the barge was damaged by a storm and the salvaging ceased. To a radiogram by plaintiff recommending stripping and abandoning the Secre- tary of the Navy replied by radio directing that the salvage stop and the salvaged material be turned in to the district commandant. Thereupon the plaintiff stripped the wrecked barge of its apparel and delivered the same to the commandant. Held, that plaintiff was not authorized to proceed to the strip- ping and was not entitled to recover the expense thereof in addition to the sum accepted in settlement of the written con- tract. Sloan Danenhower & Co., 561.
I. (1) Where work under a contract for the manufacture of raincoats was suspended in good faith by the Secretary of War because of the indictment of a member of the con- tracting firm for alleged bribery and the making of defective war material in fulfilling the contract, and an order for raincoats, with terms different from those of the contract, was substituted by the Government for the contract, and in settlement of the order, upon its termi- nation, the contractor gave a full release to the United States in connection with the order, and made no objection to the course pursued, the settlement so made is to be taken as a settlement not only of the order but of the contract, and the contractor is bound accordingly. (2) Under the circumstances recited the Secretary of War had authority to suspend the work. His authority to cancel the contract not decided. Harris et al., 9.
II. Where an agent of the Government, before the intervention of Federal control on August 1, 1918, sent messages on Government business over plaintiff's telegraph lines, and the plaintiff, claiming the messages were not subject to Government rates, charged the agent on its books with the full commercial rates, and in settlement at the end of Federal control the account, still unpaid but which the Government was ready and willing at all times to settle at the rates prescribed by the Postmaster General pursuant to section 2 of the act of July 24, 1866, and not otherwise, was passed back to the plaintiff at its face value," the circum-
stances do not establish the validity of the account at the commercial rate. Western Union Telegraph Co., 38.
III. A release is subject to explanation as to the subject matter of the accord and satisfaction, and notwithstanding a mutual release, signed upon cancellation of a contract, is inclusive in its terms, the intention of the parties to exclude there- from an item concerning which there was no dispute, will govern. Packard & Co., 184.
IV. Final settlement between the Director General of Railroads and the receiver of plaintiff's railroad construed to except therefrom the claims of third persons. Chicago & Eastern Illinois Ry. Co., 193.
See also Res Adjudicata. SOVEREIGNTY.
Sovereignty is a political question, and where the executive and legislative branches of a constitutional government have ex- ercised over a territory the right of taxation, the right of eminent domain, and police powers it is a possession of the said government and not foreign territory. Luckenbach S. S. Co., 679.
SPECIAL JURISDICTION.
See Constitution; Indians, II; Patents. STATUTE OF LIMITATIONS.
I. When an order discontinuing experimental work, conducted under an informal agreement, is given more than six years prior to commencement of suit against the United States for value of the services rendered and the goods fur- nished, the claim is barred by the statute of limitations, notwithstanding a written order for the work is issued subsequent to the order of discontinuance and within the statutory period. Mazer Acoustile Co., 31.
II. (1) Where a cost-plus-profit contract with the Government provided that the prime contractor should not be required to make any payment to the subcontractor until the same was authorized and approved by the construction division of the Army, the cause of action in the prime contractor, suing for the use and benefit of the subcontractor for a contract fee, did not arise and the statute of limitations did not begin to run before the construction division au- thorized and gave its approval to the payment. (2) Where the cause of action in the circumstances recited arose after the court having jurisdiction of receivership proceedings, the prime contractor having become insolvent, decreed a judicial release to the United States of all claims arising out of the contract, the decree did not include release as to the subcontractor's fee. Hugger et al., 97.
III. Claim for freight transportation furnished the Government accrues upon rendition of the service, and the statute of limitations, sec. 156, Judicial Code, runs therefrom. Atlantic Coast Line R. R. Co., 576.
See also Taxes, XVIII, XXVIII. STATUTORY CONSTRUCTION.
I. The elimination of a specific provision as first reported to a branch of the legislature, which, if enacted, would exempt certain associations from taxation, is very persuasive as indicating an intention on the part of Congress that they are not to be exempt and in interpreting the act as passed the court may consider all prior statutes. Atlantic Coast Line R. R. Co., 378.
II. Statutes are not to be given a retroactive effect unless the legislative purpose to do so plainly appears. Luckenbach S. S. Co., 679.
III. Where an executive department has construed a statute a certain way, its reenactment by Congress without change is an adoption of such construction by Congress. Distilling Co., 726.
I. A claim for refund of income tax submitted to the Commissioner of Internal Revenue must, under the revenue laws and regulations, show the errors com- plained of, before the taxpayer can maintain suit, and a claim for refund of 1918 taxes solely on ac- count of depreciation and depletion, does not have the necessary particularity for a claim for refund of 1918 taxes on account of a net loss in the year 1919. Feather River Lumber Co., 54.
II. Where by a deed of trust power to dispose of the trust estate is to be exercised "by a will duly made and executed," without other limitation, the power of appointment is, within the meaning of sec- tion 402 of the revenue act of 1921, general, and the value of the property passing thereunder is to be included in the testator's gross estate. Minis et al., executors, 58.
III. The tax imposed by section 900 of the revenue act of 1921, is applicable to the sale of secondhand auto- mobile trucks of domestic manufacture reimported into the United States, and notwithstanding an excise tax has been paid on the original sale by the manufacturer. Lupfer et al., 134.
IV. The inheritance tax of the State of Massachusetts, paid by the administrators of an estate, is a charge against the estate within the meaning of section 203 (a) (1) of the revenue act of 1916, and as such deductible from the value of the gross estate in ascertaining the Federal estate-transfer tax. Mer- rill et al., administrators, 136.
V. Depreciation of the value of patents acquired by plaintiff, one of them being a reissue under sec. 4916, R. S., determined and found to be not greater than that allowed by the Commissioner of Internal Revenue in his assessment of income and excess- profits taxes for the year 1917. Perfect Window Regulator Co., 147.
VI. Under the statutes of the State of Nebraska the real property of an intestate, if the personal property be not sufficient therefor, may be sold for the payment of family allowance, debts, funeral charges, and ex- penses of administration, the residue, if any, of the personal property being distributed to designated beneficiaries and of the real property descending thereto in the same proportions, the widow receiv- ing an interest as in lieu of dower. Held, That the 24646-29-CC-VOL 6651
widow's interest is not vested before the intestate's death, upon the intestate's death is transferred to her, and is subject to the Federal estate-transfer tax, imposed by section 402 of the revenue act of 1921, as a part of decedent's gross estate. Nyberg, administrator, 153.
VII. Expenses for advertising, necessary to the procure- ment of income-producing contracts, are capital ex- penditures. An erroneous method of bookkeeping, whereby such expenditures were charged to current expenses, does not preclude the taxpayer from ob- taining refund of income and excess-profits taxes by calculating them on an amortization over the life of the contracts so procured. United Profit-Sharing Corporation, 171.
VIII. Where a club engages in purely social activities that are a material part of the organization, not merely incidental to another purpose, it is a social club within the meaning of the statutes which impose a tax upon the dues or membership fees of a social, athletic, or sporting club or organization." Fisler, 220.
IX. Where a donor was not actuated by a consideration of death and her motive in making the transfer did not arise therefrom, her gift was not in contemplation of death, within the meaning of the revenue acts of 1918 or 1921 providing for the estate-transfer tax. Safford et al., executors, 242.
X. Where before the effective date of the national pro- hibition act plaintiff engaged in the business of distilling alcohol for beverage purposes, had its alcohol in bond and gauged, and thereafter with- drew a portion for sale to another company for the purpose of denaturation, a loss ascertained upon regauging in excess of the allowable quantity specified in the Carlisle Act, as amended, was prop- erly taxable under the internal revenue laws, not- withstanding section 14, Title III, of the national prohibition act. Corning Distilling Co., 268. XI, Where a letter to the Commissioner of Internal Revenue is merely a request for a special assess- ment under the relief provisions of the revenue acts of 1917 and 1918, it is not a claim for refund within the meaning of section 3226, Revised Stat- utes, as amended, and on a refund due to such reassessment no interest is allowable. Stauffer, Eshleman & Co., Ltd., 277.
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