PEABODY V. STARK, 83 U. S. 240 (1872)

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U.S. Supreme Court

Peabody v. Stark, 83 U.S. 16 Wall. 240 240 (1872)

Peabody v. Stark

83 U.S. (16 Wall.) 240


1. In the absence of a clear, common conviction on the part of all the members of the Court as to the meaning of a direction relating to distillers in one of the internal revenue acts, the Court -- not holding such construction as in general obligatory on it -- expressed itself content to adopt, and did adopt accordingly, what was shown to have been the unvarying practical construction given to the direction by the office of the Commissioner of Internal Revenue from the time that the act went into effect, such construction being obviously fair to both the distiller and the government.

2. Held accordingly that under the 80 percent clause in the 20th section of the Act of July 20, 1868, the distiller is not liable until a survey in which the tax is assessed has been delivered to him as provided in the 10th section.

Stark brought an action in the court just named against Peabody, collector of internal revenue, to recover back as illegal a tax. The tax complained of as illegal was a reassessment upon the plaintiff as a distiller, in which he was assessed to the amount of 80 percent of the producing capacity of his distillery (in pursuance of section 20 of the Internal Revenue Act of July 20th, 1868), * though he had not actually made that amount of spirits, and notwithstanding the fact that no copy of the survey of his distillery fixing its producing capacity had been filed with him, or delivered to him, as required by section 10 of that same act.

The section of the internal revenue law thus last referred to requires assessors to make, or cause to be made, surveys of all distilleries registered or intended to be registered, and

Page 83 U. S. 241

to estimate and determine their true producing capacity, a written report whereof shall be made in triplicate, signed by the assessor, one copy of which shall be furnished to the distiller, one retained by the assessor, and the other immediately transmitted to the Commissioner of Internal Revenue. It also provides that the commissioner may at any time order a resurvey, the report of which shall be executed in triplicate and deposited as before provided.

On the trial the plaintiffs introduced evidence to show that 400 gallons of spirits not reported by them were lost by leakage and by being burnt &c.

The district attorney introduced evidence tending to show that although the distillers were not furnished with the certified copy of either survey, yet they had actual notice of both.

The judge instructed the jury:

"That if a copy of the survey of the distillery was not delivered to the distillers according to the requirements of section 10 of said act, that they would not be bound by the survey, notwithstanding they might in fact know what the results of it were, and that in this event the government could only exact the tax upon the actual amount of spirits produced, including the 400 gallons destroyed, as aforesaid, to which ruling the United States district attorney then and there excepted. "

Page 83 U. S. 242

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