Opinion
This case having been heard by the Court of Claims, the court upon the stipulation of facts by the parties makes the following special findings of fact.
1. The plaintiff, Fidelity Trust Company, is a corporation duly created and existing under the laws of the Commonwealth of Maryland (its principal office being in the city of Baltimore in the commonwealth of Maryland), having been incorporated on or about March 25, 1904, and its charter granted by a special act of the General Assembly of the State of Maryland, approved March 25, 1904, chapter 149, General Laws of Maryland, 1904. This charter was amended and said amendment was confined to the increase of the capital stock of the plaintiff under section 2 thereof.
The aforesaid plaintiff has been continuously since the above date (March 25, 1904) acting and doing business as a corporation created and existing under the laws of the Commonwealth of Maryland, as aforesaid.
2. The plaintiff, by reason of the power and authority conferred upon it by its charter and amendment thereto (sections 4-9), was authorized and empowered to carry on various classes of business covering the taxing periods from November 1, 1949, to December 31, 1916, and thereafter--to receive and hold on deposit, in trust and as security, any estate or property, real, personal, or mixed, including cash, notes, bonds, and obligations of states, companies, etc.; to receive money subject to check, to buy and sell exchange, and to lend money on personal or other security; to act as trustee in or under any mortgage, bond, or other instrument or evidence of debt issued by any municipality, body politic, or corporation; to accept and execute trusts of any and every description as fully as a natural person could; to accept the office and appointment of executor or administrator of any kind or nature; to act as receiver, curator, trustee, administrator, executor, assignee, guardian, committee, or other fiduciary; to execute all authorities and attend to, care for, and manage, all business of every kind, including sale, lease, or other disposition of property, real or personal, etc., to exercise powers of sale of mortgaged premises; to act as a safe depositary of any and all property of every description for safe-keeping; to act as agent for the purpose of issuing, registering, or countersigning securities of every description, and various other powers conferred upon the plaintiff corporation by a special act of the General Assembly of the State of Maryland, being chapter 149 of the laws of the State of Maryland, approved on the 25th day of March, 1904, entitled "An Act to incorporate the Fidelity Trust Company" (Laws of Maryland, 1904), as is shown by Exhibit B attached to the stipulation and made a part hereof by reference.
3. Under the act of Congress approved October 22, 1914, entitled "An Act to increase the internal revenue, and for other purposes" (38 Stat. 745, § 3), and the act extending the same to December 31, 1916 (39 Stat. 2), there were paid by the plaintiff bankers' special taxes as follows:
For the period from November 1, 1914, to June 30, 1915,at $1.00 per thousand, paid December 12, 1914............................
$1,418.67
For the period from July 1, 1915, to December 31, 1915,at $1.00 per thousand, paid September 14, 1915.......................
1,093.00
For the period from January 1, 1916, to June 30, 1916,at $1.00 per thousand, paid March 14, 1916......................................
1,093.00
For the period from July 1, 1916, to December 31, 1916,at $1.00 per thousand, paid August 26, 1916..........................
1,132.50
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Total tax on capital .......................
$4,737.17
4. It is claimed by the plaintiff in this case that Senate bill No. 694, 74th Cong., 1st Sess., automatically on the 1st day of July, 1935, became a law, which reads as follows:
"That the Commissioner of Internal Revenue be, and he is hereby, authorized and directed to receive, consider, and adjudicate claims for refund of the Bankers Special Tax paid under the Acts of June 13, 1898, and October 22, 1914, in view of the decisions of the Supreme Court of the United States in the case of Fidelity & Deposit Company v. United States, 259 U.S. 296, 42 S.Ct. 511, 66 L.Ed. 948, and the United States v. Fidelity & Deposit Company, 266 U.S. 587, 45 S.Ct. 128, 69 L.Ed. 455, and in accordance with the agreement made March 3, 1925, between the Attorney General and the Secretary of the Treasury as a basis for settlement of such claims: Provided, That no claim shall be considered which is filed later than six months after the passage of this Act. "Sec. 2. That the Secretary of the Treasury is hereby authorized and directed to pay out of any money in the Treasury not otherwise appropriated, to such claimants any amount due and allowed in the determination of any such claims which shall have been presented in accordance with this Act."
The said refunding bill above set out was on June 18, 1935, presented to the President of the United States, it having passed both Houses and having been duly signed by the Speaker of the House of Representatives and the President of the Senate. The Senate at 5:35 p.m. Thursday, June 27, 1935, took a recess and was not in session thereafter until 12 o'clock noon on Monday, July 1, 1935. During the interim the President of the United States, on June 28 or 29, sent by messenger a message addressed to the Senate (the House in which the above mentioned bill originated), dated June 27, 1935, returning without approving the bill, giving his reasons for not approving it. The Senate not being in session, the aforesaid message of the President was received by Edwin A. Halsey, Secretary of the Senate, on June 28 or 29, 1935, these facts being shown by executive document No. 105, 74th Cong., 1st Sess., marked Plaintiff's Exhibit A and made part of this finding by reference. The House of Representatives was in session during aforesaid recess.
The plaintiff's claim for refund is based upon the contention that the aforesaid Senate Bill No. 694 automatically became a "refunding act" on the 1st day of July, 1935, under the above-mentioned article of the Constitution of the United States.
5. A substantial part of the capital, surplus, and undivided profits of this plaintiff was not used or employed as a banker or in the banking business within the meaning of section 3 of the Emergency Revenue Act of October 22, 1914, aforesaid. To the contrary, surplus, and undivided profits of this plaintiff was permanently invested in stocks, bonds, and other securities covering the entire taxing period, and the use of the aforesaid capital, surplus, and undivided profits of the plaintiff company was confined to its trust department or other business of this plaintiff, other than as a banker or in the banking business covering the entire taxing period from November 1, 1914, to December 31, 1916, and to the following extent the special bankers' taxes, aforesaid collected from this plaintiff, were therefore illegally collected, namely:
For the period from November 1, 1914 to June 30, 1915(with interest from December 12, 1914).............................
$ 657.55
For the period from July 1, 1915, to December 31, 1915(with interest from September 14, 1915)............................
506.61
For the period from January 1, 1916, to June 30, 1916(with interest from March 14, 1916)................................
506.61
For the period from July 1, 1916, to December 31, 1916(with interest from August 26, 1916)............................
446.09
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Total amount claimed to be refundable (withinterest)....
$2,116.86
The foregoing amount of $2,116.86 claimed to be refundable with interest to the plaintiff is in accordance with the provisions of the agreement dated March 3, 1925, made by and between the honorable Attorney General and the honorable Secretary of the Treasury for the settlement of this and other claims of this class in accordance with the decisions of the Supreme Court of the United States (Fidelity & Deposit Company v. United States, 259 U.S. 296, 42 S.Ct. 511, 66 L.Ed. 948; United States v. Fidelity & Deposit Company, 266 U.S. 587, 45 S.Ct. 128, 69 L.Ed. 455), which agreement marked Exhibit C to the stipulation is made a part hereof by reference.
6. On or about October 16, 1935, the plaintiff by its attorney duly filed an application with the Commissioner of Internal Revenue under the alleged refunding act of July 1, 1935, praying for the refund of the total amount of the special bankers' tax paid, in the sum of $4,737.17, under the act of October 22, 1914, and amendment thereto, who in the regular course of this official business received the same. This application was made on Form 843 of the office of the Commissioner of Internal Revenue of the Treasury Department, as required, and was in all respects complete, regular, and in accordance with the rules and regulations, and was accompanied by all the necessary evidence and proof of facts giving the reasons why said tax was erroneous and illegal and refundable to it under the alleged act of July 1, 1935, aforesaid. The facts alleged in the application were not traversed or denied by the Secretary of the Treasury or by any representative of the United States. Nevertheless, on November 30, 1935, the Commissioner of Internal Revenue refused and denied the application upon the following ground:
"Reference is made to the claim filed by you on behalf of the Fidelity Trust Company of $4,737.17, banker's special tax imposed by the Revenue Act of 1914. You state that a bill authorizing the Commissioner of Internal Revenue to receive, consider, and adjudicate claims for refund of bankers' special taxes paid under the Revenue Acts of 1898 and 1914 [30 Stat. 448, 38 Stat. 745] automatically became a law for the reason that a message from the President of the United States containing his objections to the bill were not received by the Senate and entered on its journal as required by article 1, section 7, Clause 2, of the Constitution of the United States, until more than ten days after the bill had been presented to the President. You therefore believe the claim should receive favorable consideration.
"A careful review has been made of the facts and the statements made by you in support of the claim and it has been concluded that the bill did not become a law.
"Your claim is accordingly rejected." [Copyrighted Material Omitted] Simon Lyon, of Washington, D.C. (Lyon & Lyon of Washington, D.C., on the brief), for plaintiff.
George H. Foster, of Washington, D.C., and James W. Morris, Asst. Atty. Gen. (Robert N. Anderson and Fred K. Dyar, both of Washington, D.C., on the brief), for the United States.
Before BOOTH, Chief Justice, and GREEN, LITTLETON, WILLIAMS, and WHALEY, Judges.
PER CURIAM.
Upon the foregoing special findings of fact, which are made a part of the judgment herein, the court decides as a conclusion of law that the plaintiff is not entitled to recover, and its petition is therefore dismissed.
Judgment is rendered against the plaintiff in favor of the defendant for the cost of printing the record in this cause, the amount thereof to be ascertained and collected by the clerk as provided by law.
See case of Wright v. United States, No. A-261, decided February 8, 1937; affirmed by the Supreme Court January 17, 1938, 58 S.Ct. 395, 82 L.Ed.--.