With regard to declaratory relief, appellant cites three cases for the proposition that, notwithstanding 28 U.S.C.A. § 2201, an action concerning tax problems may be maintained by a taxpayer where extraordinary and exceptional circumstances are shown. Murphy v. Graves, 6 Cir., 120 F.2d 243, certiorari denied sub nom. Murphy d.b.a. La France Toledo Co. v. Brady, 314 U.S. 661, 62 S.Ct. 116, 86 L.Ed. 529; Tomlinson v. Smith, 7 Cir., 128 F.2d 808; Casale, Inc., v. Pedrick, D.C.S.D.N.Y., 72 F. Supp. 848. The Murphy and Casale cases do not so hold, expressly or tacitly, and in each, declaratory relief was denied.
See Internal Revenue Code of 1939, § 3940 et seq. See also Agnew v. Haymes, 141 F. 631, 640 (4th Cir. 1905) ("The protection afforded by [§ 2006] is confined to officers of the revenue"); cf. John J. Casale, Inc. v. Pedrick, 72 F. Supp. 848, 850 (S.D.N.Y. 1947) ("Any person required to pay the collector a tax . . . is a taxpayer and this is so though he must first collect such tax from another taxpayer") (emphasis supplied); S.Rep. No. 1625, 89th Cong., 2d Sess. (1966) quoted p. 1302 supra, 1966 U.S. Code Cong. Admin. News 3676. It is so ordered.
F.2d 178; Jolles Foundation, Inc. v. Moysey, 2 Cir., 250 F.2d 166; Carmichael v. United States, 5 Cir., 245 F.2d 676; Martin v. Andrews, 9 Cir., 238 F.2d 552; Taylor v. Allan, 10 Cir., 204 F.2d 485; Noland v. Westover, 9 Cir., 172 F.2d 614, cert. den. 337 U.S. 938, 69 S.Ct. 1515, 93 L.Ed. 1744; Commissioner of Int. Rev. v. Procter, 4 Cir., 142 F.2d 824, 154 A.L.R. 1215, cert. den. 323 U.S. 756, 65 S.Ct. 90, 89 L.Ed. 606; Tomlinson v. Smith, 7 Cir., 128 F.2d 808; Red Star Yeast Products Co. v. La Budde, 7 Cir., 83 F.2d 394; Pilip v. United States, D.C.Alaska, 186 F. Supp. 397, opinion supplemented 191 F. Supp. 943; Christenson v. Brodrick, D.C.Kan., 169 F. Supp. 388; England v. United States, D.C.Ill., 164 F. Supp. 322; Standard Oil Co. (N.J.) v. McMahon, D.C.S.D.N.Y., 139 F. Supp. 690, aff'd 244 F.2d 11; General Mutual Ins. Co. v. United States, D.C.S.D.N.Y., 119 F. Supp. 352; Kyron Foundation, Inc. v. Dunlap, D.C.D.C., 110 F. Supp. 428; John J. Casale, Inc. v. Pedrick, D.C.S.D.N.Y., 72 F. Supp. 848. But, in the case at bar, however, one plaintiff-taxpayer seeks declaratory relief from an alleged breach of contract by the other contracting party, which breach plaintiff claims will result in serious consequences of a tax nature to it.
Defendant argues that the effect of 26 U.S.C. § 6671(a) was to place the penalty imposed in the same class as taxes assessed and thereby subject to the prohibitions contained in 26 U.S.C. § 7421(a). Authority cited in the district courts appear to sustain this view; Rosner v. McGinnes, 167 F. Supp. 44 (E.D. Pa.); McAllister v. Dudley, 148 F. Supp. 548 (W.D.Pa.); Hendley v. A.R. Knox, 133 F. Supp. 36 (Minn.); Casale v. Pedrick, 72 F. Supp. 848 (S.D.N.Y.) In the cases cited, the plaintiff failed to show special facts and circumstances.
They also complain a levy to support collection of the taxes will result in irreparable damage to them. 1. § 7421(a) of the Internal Revenue Code of 1954 (formerly § 3653(a) of the 1939 Code, etc.) says no suit against assessment can be maintained. Against such suits to enjoin, the inflexible application of the statute was noted in the In re State Railroad Tax Cases, 92 U.S. 575, 23 L.Ed. 663. See, too, Burke v. Mingori, 10 Cir., 128 F.2d 996; and Reams v. Vrooman-Fehn Printing Co., 6 Cir., 140 F.2d 237; Cadwalader v. Sturgess, 3 Cir., 297 F. 73; John J. Casale, Inc., v. Pedrick, D.C.S.D.N.Y., 72 F. Supp. 848; Headley v. Knox, D.C.Minn., 133 F. Supp. 36; McAllister v. Dudley, D.C.W.D.Pa., 148 F. Supp. 548. 2.
Actions to enjoin the collection of civil penalties have been held barred. Reams v. Vrooman-Fehn Printing Company, supra; John J. Casale, Inc., v. Pedrick, D.C.N.Y., 72 F. Supp. 848; Helvering v. Mitchell, 303 U.S. 391, 58 S.Ct. 630, 82 L.Ed. 917; Plunkett v. Commissioner, 1 Cir., 118 F.2d 644. Counsel earnestly argues that the plaintiffs are not the "taxpayers", and therefore cannot make claim and recover what they paid for the reason that, if they are civil penalties, they merge into and become the tax.
This tax is to be collected by the carrier and liability is imposed upon the carrier for collection thereof. See 26 USCA 141, Internal Revenue Code § 4291; John J. Casale, Inc. v. Pedrick, 72 F. Supp. 848. This Act has been interpreted as imposing no tax liability if the transportation of the goods and merchandise is accomplished by the shipper through the use of his own or leased equipment. Earle v. Babler, CA Or 1950, 180 F.2d 1016. It follows, if the contract is the oral engagement as contended for by the defendant, a Federal tax liability was created; if the written leases represent the contractual relationship of the parties no tax liability exists.