[271] [272] UNITED STATES, Piff. in Err., v. JOHN D. SANBORN. JOHN D. SANBORN, Piff. in Err., v. UNITED STATES. United States (ctober 15, 1883, to recover (See S. C. Reporter's ed. 271-286.) ment. 1. Where a contract was made by the Secretary of It was provided by an Act of Congress, 4. The United States is entitled, as costs, on recov- 6. No auditing of such expenses is required; they [Nos. 224, 225.] Argued Mar. 21, 1890. Decided Apr. 28, 1890. ERROR to the Circuit Court of the The facts are stated in the opinion. Mr. Alphonso Hart, Solicitor of Internal Mr. Justice Harlan delivered the opinion of the court: These are writs of error from the same judgment. The action was brought by the NOTE.-When money wrongfully and illegally exacted may be recovered back. See note to Bank of As to action to recover back duties paid under protest, see note to Greely v. Thompson, 13: 398. U. S. v. Bank of Washington, 8: 299. As to interest, when recoverable as damages or on money, see note to Sneed v. Wister, 5: 717. the Secretary of the Treasury, the character " On the 15th day of July, 1872, Sanborn [273] sent to the Secretary of the Treasury a communication, verified by his oath, submitting a statement under the above Act, and proposing to recover, or assist in recovering, moneys due the United States for evasions of, and frauds upon, the laws for the collection of internal revenue tax on spirituous and fermented liquors, as well in making false returns of the amounts manufactured as in evading the payment of taxes upon those returadi, td t allowed, in the form of a percentage, such amount from the collections as in the judgment of the Secretary was fit and meet. This letter was followed by a written contract between Sanborn and the acting Secretary of the Treasury under date of August 13, 1872, in which it was agreed that the former might proceed to collect the taxes so alleged to be due to the United States by the persons named; that legal proceedings in the premises should be conducted by the proper United States attorneys, the written consent of the Secretary of the Treasury being first obtained; that no settlement of such claims should be made except under the provisions of section 10 of the Act of March 3, 1863; that the costs and expenses incurred by him in investigating and prosecuting said claims, of every nature, should be borne by him, and no part thereof paid out of the portion retained by the United States; that whenever required by the Secretary he should make a full report in writing of his acts and proceedings under the contract; that the [274] money collected, either by legal proceedings On the 25th of October, 1872, Sanborn sent "District Waldenham The Secretary, under date of February 3, 1873, issued a paper addressed "To supervisors and collectors of internal revenue, in which he requested them to assist Sanborn "in the examination of official records in reference to such cases of alleged violation of the Internal Revenue Laws as he may ask for your co-operation," stating that he was acting under his appointment, and "may need some information from the offices of collectors and assessors for the purpose of verifying his claims." Subsequently, on the 15th of October, 1873, the Secretary issued a similar circular, and asked supervisors and collectors to render Sanborn such assistance as he required. General John E. Wool died at Troy, New York, November 10, 1869, leaving a large estate, Mrs. Wool surviving him. His will having been duly probated on the 8th of February, 1870, letters testamentary were is sued to John A. Griswold and Asher R. Morgan. Subsequently, October 31, 1872, Griswold died leaving Morgan as sole executor. Mrs. Wool died May 7, 1873. On the first day of August, 1873, Morgan delivered to Lucien Hawley, a supervisor of internal revenue, in payment of taxes due from the estate of Wool, his draft, as executor, upon the United States Trust Company of New York, payable to the order of the Secretary of the Treasury, for the sum of $14,668. Hawley delivered it to Sanborn on or about its date, and on the 3d of August, 1873, the latter inclosed it to the Secretary of the Treasury, in a letter of which the following is a copy: "Referring to the contract made by me with the Hon. George S. Boutwell, late Secretary of the Treasury, bearing date August 13, 1872, and as amended by the agreement October 30, 1872, I have the honor to report that Asher R. Morgan, executor of the estate of General John E. Wool, deceased, late of Troy, N. Y., and one of the parties named in my schedule accompanying said contract, has paid to me the sum of $14,668, being the full amount of taxes due the government by him arising [276] from the legal assessment on legacies and successions of said trust, and which has never before been paid. I herewith inclose said sum and respectfully request that one half of the same shall be paid into the Treasury to the credit of the Secretary of the Treasury, and that the remaining half thereof shall be paid to me in accordance with the terms of my said contract. Please transmit receipt to Mr. Morgan, No. 7 Beekman Street, New York." "Whereas John D. Sanborn, of the City of Boston, has fully set forth in a written statement signed by him, under oath, and has filed the same in the office of the Secretary of the Treasury, wherein he proposes to recover, or assist the proper officers of the government in recovering, for the United States from the following persons, to wit: John E. Wool estate, large sum of money, that is to say, the sum of fifty thousand dollars, which the said Sanborn claims to be due to the United States, as and for internal revenue taxes which have been withheld by said persons, under and by force of the Act of June 30, 1864, and other Acts amendatory thereof, imposing taxes upon legacies, successions and incomes; it is here- The Secretary of the Treasury on the 9th by agreed by and between W. A. Richardson, of August, 1873, indorsed this draft to the acting Secretary of the Treasury, of the first order of the Treasurer of the United States, part, and the said John D. Sanborn, of the and directed the latter to deposit it to the second part, that the contract or agreement special credit of the Secretary on account of entered into by and between the said parties, moneys received and paid under the first secbearing date August 13, 1872, relating to tion of the Legislative, Executive and Juthe proposed recovery of certain moneys al- dicial Appropriation Act, approved May 8, leged to be due to the United States, is here- 1872. The draft, having been indorsed by by extended and enlarged, so as to embrace the treasurer of the United States to the as[275] and relate to the persons herein specifically sistant treasurer of the United States at New enumerated; and all the provisions, condi-York, was paid by the United States Trust tions and terms of the said contract of August Company, and the proceeds were placed to 13, 1872, shall be held to apply to and control the special credit of the Secretary of the this agreement." Treasury. [277] him. What are the facts, disclosed by the On the 16th of August, 1873, the Secretary | fendant insists that they were collected under As by section 125 of the Act of June 30, 1864, amended by that of July 13, 1866 (14 Stat. 140, chap. 184) a legacy tax was due and payable whenever the party interested was entitled to the enjoyment of the legacy, or to the beneficial interest in the profits accruing therefrom, there was some discussion at the bar in respect to the time when the legacies in question vested in possession and enjoyment; whether immediately upon the death of the testator, as claimed by the defendant, or at the death of the widow, as claimed by the government. The Solicitor of Internal Revenue contends that although the tax was not collectible until Mrs. Wool died, liability therefor arose immediately upon the death of the testator, and that such liability was not discharged, but was saved, by the Act of July 14, 1870, abrogating all legacy taxes. 16 Stat. 256. He also contends that these taxes, not being payable until Mrs. Wool died, were not, within the meaning of the Act of May 8, 1872, under which this contract of October 30, 1872, with Sanborn purports to have been made, "withheld" from the United States at the time that contract was made. On this last ground he questions the authority of the Secretary of the Treasury to have allowed Sanborn any part of the sum collected from Wool's estate on account of legacies. Within a few weeks after the death of the widow, Morgan-upon his own motion, without having known Sanborn, and without having the matter brought to his attention by Sanborn, or by anyone representing himwrote to the Secretary of the Treasury asking that the question of a succession and legacy tax from the estate of General Wool be referred to some person having authority to pass upon his liability to pay it. This was followed by a communication, under date of the 12th of July, 1873, by the commissioner of internal revenue, addressed to Collector Masters, in which the former said: "T. J. Cram, of 1817 De Lancey Place, Philadelphia, Pennsylvania, writes: MajorGeneral Wool, U. S. A., died November 10, 1869 (in Troy, N. Y., his residence), leaving legacies of $4,000 each to my wife and myself. But there was a condition in the will forbidding his executors from paying any legacies until after the death of his wife. Mrs. Wool died 6th May last. The executor proposes to retain from the legacies U. S. tax of 6 per cent on payment 18th inst. of the legacies, etc. There is nothing in the statements above to show that the said legacies are not subject to tax, but the same would appear to be liable, as indicated in Circular 86. (See p. 30, Series 6, No. 1.)" At the date of General Wool's death Masters was collector of internal revenue, his district including the City of Troy. He and his deputy knew of his death at or about the time it occurred, and knew that he left a large estate. They also knew what were the provisions of his will and talked together, both before and after Mrs. Wool died, in reference to the claim that a legacy_tax would be due after her death. Prior to July 31, 1873, Morgan received from the Secretary of the Treasury a letter referring all questions relating to these taxes to Lucien Haw. ley, supervisor of internal revenue, with whom he had several conversations upon this subject. The collector, Masters, under date of July 31, 1873, addressed a letter to Morgan, as executor, in which he said: "No It is unnecessary in the present case to ex- return has been made to me of the legacies amine any of these questions; for both of and distributive shares of the estate of the the parties to the present suit insist that these late General John E. Wool, of whose will I taxes were, when collected, legally due from am informed you are the only surviving exWool's estate to the government. The de-ecutor who has qualified as such. Inclosed [278] [279] herewith is the 'collector's notice for legacy | competent authority of the question of his It is stated in the finding that about one month after the death of Mrs. Wool the defendant called on Hawley "for aid in the matter of collecting the tax due from the estate of said John E. Wool." The suggestion that Sanborn was entitled to fifty per cent of all collections from the persons named in his contract, by whomsoever, or in whatever mode, such collections were made, is wholly inadmissible. The contract, upon its face, contemplated, as a condition of his receiving compensation, that he should do something of a substantial character in collecting the taxes alleged to be withheld. We are of opinion that the payment of the amount so paid ought, in equity and good In view of the findings, which, upon this But we are of opinion that the court be- interest is recoverable as of right, when re- The writ of error on behalf of the govern- [281] [282] [283] "Sec. 850. When any clerk or other officer of the United States is sent away from his place of business as a witness for the government, his necessary penses, stated in items and sworn to, in going, returning and attendance on the court, shall be audited and paid; but no milage or other compensation in addition to his salary shall in any case be allowed." "Sec. 983. The bill of fees of the clerk, marshal and attorney, and the amount paid printers and witnesses, and lawful fees for exemplifications and copies of papers necessarily obtained for use on trials in cases where by law costs are recoverable in favor of the prevailing party, shall be taxed by a judge or clerk of the court, and be included in and form a portion of a judgment or decree against the losing party. Such taxed bills shall be filed with the papers in the cause." allowance whatever in the taxation for costs "Sec. 848. For every day's attendance in court, or before any officer pursuant to law, one dollar and fifty cents and five cents a mile for going from his place of residence to the place of trial or hearing, and five cents a mile for returning. When a witness is subpenaed in more than one cause between the same parties, at the same court, only one travel fee and one per diem compensation shall be allowed for attendance. Both shall be taxed in the case first disposed of, after which the per diem attendance fee alone shall be taxed in the other cases in the order in which they are disposed of. When a witness is detained in prison for want of security for his appearance, he shall be entitled, in addition to his subsistence, to a compensation of one dollar a day. "Sec. 849. No other officer of the United States courts, in any State or Territory, or in the District of Columbia, shall be entitled to witness fees for attending before any court or commissioner where he is officiating. audit," in that section, does not necessarily imply that these expenses must be audited, in the first instance, by an executive department or officer. The bill for such expenses is unlike the ordinary claim for per diem and milage. The Statute fixes the amount to be allowed for attendance and milage to witnesses entitled to claim therefor, and no auditing in respect to such claims is required; whereas, the items that enter into the account of a clerk or other officer, sent away from his place of business as a witness for the government, for his necessary expenses "in going, returning and attendance on the court," cannot well be known to the court or its clerk, and must be furnished by the witness himself. Those items are to be examined, looked over and adjusted; in other words, they must be audited. The auditing contemplated by section 850 must be done, primarily, in the court in which the case is pending, and where it can be best determined what expenses have been necessarily incurred by the witness. This construction of the section is supported by section 983, which provides that the amount paid, that is, properly paid, to witnesses, shall be taxed by a judge or clerk of the court, and be included in and form a portion of the judgment or decree against the losing party; by section 855, providing that in cases where the United States are parties the marshal shall, on the order of the court, to be entered in its minutes, pay to the witnesses all fees to which |