STOLL V. PEPPER, 97 U. S. 438 (1878)

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U.S. Supreme Court

Stoll v. Pepper, 97 U.S. 438 (1878)

Stoll v. Pepper

97 U.S. 438


If a distiller uses material for distillation in excess of the estimated capacity of his distillery, according to the survey made and returned under the provisions of the law regulating that subject, but, in the regular course of his business, pays the taxes upon his entire production, he cannot be again assessed at the rate of seventy cents on every gallon of spirits which the excess of material used should have produced, according to the rules of estimation prescribed by the internal revenue law.

The court below found the following facts:

Robert P. Pepper, was a distiller within the seventh district in the State of Kentucky, and the surveyed capacity of his distillery was 151 82/100 bushels per day. During the months of May, June, July, and August, 1873, he produced spirits in excess of the surveyed capacity to the number of 2,261 1/4 gallons, on which a tax was payable amounting in the aggregate to the sum of $1,582.86.

The surveyed capacity of the said distillery was duly reported to the Commissioner of Internal Revenue, and the spirits produced, including the said excess, were drawn from the receiving cistern and placed in the government warehouse attached to the distillery, and were duly reported and assessed, and bonds for the payment of the tax was given according to law, all of which was duly reported to the Commissioner of Internal Revenue.

Afterwards the commissioner made an assessment of seventy cents per gallon for all the spirits produced in excess of the surveyed capacity during the months of May, June, July, and August, and directed the defendant Stoll, collector of the seventh district, to collect the same.

This assessment was made under the twentieth section of

Page 97 U. S. 439

the Act of June 6, 1872, and was made for the same spirits upon the same number of gallons, and for the same amount for which the taxes had already, under the first regular reports, been assessed and secured by bond, and which have since been paid, so that a collection of this assessment by the Commissioner of Internal Revenue would enforce a double payment of the tax upon the spirits.

In the production of spirits in excess of the estimated capacity no evasion of law was intended, and no benefit was derived from it by Pepper, the plaintiff, but the distillery was run beyond its surveyed capacity with the knowledge of the government officers, including the collector.

On the 9th of January, 1874, the defendant, after having made demand of the plaintiff for payment of the amount assessed for the said excess, and the plaintiff having refused payment, seized one hundred and fifty barrels of spirits belonging to the plaintiff, and containing 6,497 1/2 proof gallons, and after advertising the same for ten days, sold the whole lot at Frankfort, the place of seizure, for the sum of $1,798.70, being the amount of taxes assessed, inclusive of costs and penalties.

Said plaintiff before and at the time of seizure, and at the sale, in writing, protested to the defendant against the said proceedings, and notified him that he would hold him liable, and at the time of the sale of the said spirits the plaintiff was present, and warned bidders that the sale was illegal, and he would hold the purchasers responsible for the value of the whiskey.

Before this suit was brought, the plaintiff appealed to the Commissioner of Internal Revenue, according to law, for the correction of the said assessments as erroneous and illegal, and the said appeal was rejected. The spirits seized were, at the time of the seizure and up to the time of sale, of the market value of fifty-five cents per gallon, and of the aggregate value of $3,573.62. The court being of opinion that the second assessment by the Commissioner of Internal Revenue was not authorized by law, but that the plaintiff could not recover more than the amount actually collected, with interest at the rate of six percent per annum, gave judgment that he recover the sum of $1,887.43, with interest thereon at the rate of six percent

Page 97 U. S. 440

per annum from the twenty-fifth day of November, 1874, until paid, and his costs.

The collector then sued out this writ of error.

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