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BICKETT COAL & COKE CO. v. UNITED STATES

[67 C. Cls. 53; 280 U. S. 583]

Petition for writ of certiorari was denied by the Supreme Court October 21, 1929.

CHINNIS v. UNITED STATES

[67 C. Cls. 262; 280 U. S. 593]

Petition for writ of certiorari was denied by the Supreme Court October 21, 1929.

SWEET, TRUSTEE, v. UNITED STATES

[68 C. Cls. 109; 280 U. S. 598]

Petition for writ of certiorari was denied by the Supreme Court November 4, 1929.

HANNA, EXECUTOR, v. UNITED STATES

[68 C. Cls. 45; 280 U. S. 612]

Petition for writ of certiorari was denied by the Supreme Court January 27, 1930.

NILES BEMENT POND CO. v. UNITED STATES

[67 C. Cls. 693; 281 U. S. 357]

Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding:

1. Findings by the Court of Claims that the controlling plan of a taxpayer's accounts was to show income upon an accrual basis and that its tax returns were on that basis are conclusive on review.

2. Under the revenue acts of 1916 and 1918, the commissioner may correct a return so as to reflect true income by conforming to the dominating and controlling character of the taxpayer's system of accounts.

3. In computing the net income of a domestic corporation keeping its books on the accrual basis, foreign taxes paid in the tax years should not be deducted if they accrued in prior years and their deduction in those years was necessary to ascertain true income.

4. It is to be presumed that taxes paid are rightly collected upon assessments correctly made by the commissioner; and in a suit to recover them the burden rests upon the taxpayer to prove all the facts necessary to establish the illegality of the collection.

Mr. JUSTICE STONE delivered the opinion of the Supreme Court April 14, 1930.

CHESAPEAKE & POTOMAC TELEPHONE CO. v. UNITED STATES

[68 C. Cls. 273; 281 U. S. 385]

Judgment was rendered in favor of the United States in the court below. Upon certiorari the judgment was affirmed, the Supreme Court deciding:

A telephone company, while under a standing written contract, made with the Secretary of the Treasury pursuant to the act of June 17, 1910, to furnish telephone equipment and service to the War Department, installed in a building especially constructed for it by the Government, an unusually large and very expensive switchboard to meet the growing needs of the department during the World War; and after the need was over and the switchboard had been removed, it sued under the Dent Act to recover the cost of installation less salvage. Held, upon the facts as found below:

1. That the switchboard was covered by the written contract, and that the conduct of the parties following installation was consistent with this view.

2. That a contract for extra pay was not to be implied either (a) from claims addressed to officials of the department having no authority to bind the Government and not assented to by them or known to their superiors; or (b) from the fact that the plans for the special building showing the switchboard and equipment proposed, were submitted to the Secretary of War; or (c) from the fact that the Government had continued to use the switchboard after the claims were made.

Mr. JUSTICE HOLMES delivered the opinion of the Supreme Court May 5, 1930.

INDEX DIGEST

ADMINISTRATORS AND EXECUTORS.

See Postal Savings; Taxes, XXXIII, XXXIV, XXXVIII,

AGENCY.

XXXIX.

See Conflict of Laws; Contracts, II; Sale of Supplies, III.
ALIENS.

See Settlement Contracts, I (2).

APPROPRIATIONS.

See Pay, II; Taxes, XIV.

ARMY PAY.

See Pay, I, II, IV; Rental and Subsistence Allowances, I, II.
AUTHORITY OF PUBLIC OFFICERS.

See Leases, II; Sale of Supplies, I (1), II, III, V; Taxes, X, XIV,
XV, XXIII, XXVI, XLV, XLVII, LVI, LVIII, LIX, LXI,
LXII, LXIX (1).

BONDS.

See Reformation of Contract; Statute of Limitations, I; Taxes,
XXXV.

BONUS.

See Pay, III.

BURDEN OF PROOF.

See Contracts, VII; Leases, I (1); Sale of Supplies, II; Taxes,

III, L.

CHARTER PARTY.

See Eminent Domain, III.

COMMUTATION OF QUARTERS, ETC.

See Rental and Subsistence Allowances.

CONFLICT OF LAWS.

I. By section 124 of the national defense act Congress au-
thorized inter alia the construction of "dams,
power houses, and other plants
for the gener⚫
ation of electrical or other power," and as to the "prod-
ucts of such plants" provided that "any surplus which
he [the President] shall determine is not required shall
be sold and disposed of by him under such regulations
as he may prescribe," authorizing and empowering him
"to employ such
agencies as may in his dis-
cretion be necessary to enable him to carry out the pur-
poses herein specified." The Secretary of War leased a
773

CONFLICT OF LAWS-Continued.

certain surplus amount of the gross electric current pro-
duced by the plant constructed under the act to an Ala-
bama corporation, the balance being used by the United
States for its own purposes. The State of Alabama
levied and attempted to collect a tax on said surplus on
the basis of so much per kilowatt-hour of current sup-
plied to the corporation. Held, that the statute of the
State of Alabama imposing the tax was in conflict with
the constitutional rights of the United States and as to
such rights was void. State of Alabama, 340.
II. The United States has the right in carrying out its consti-
tutional powers, to purchase, hold, possess, and sell its
property, and without hindrance by the States. Id.
III. No State can by taxation limit, diminish, qualify or inter-
fere in the exercise of this right and a statute having
this effect is unconstitutional and void as to the United
States.

Id.

IV. The immunity from taxation of the property and instru-
mentalities of the United States Government is founded
upon the condition that if such taxation were permitted
it might result in crippling Federal revenues. Id.
V. If the constitutional power exists Congress has authority
to select the means and methods of carrying it into ef-
fect and to create such agencies to that end as it may
see fit. Id.

VI. Where Congress has passed a statute authorizing the doing
of a certain thing and the creation of a certain agency
and given full authority to the Executive to accomplish
that purpose, and thus expressed its constitutional right
so to do, the court will not undertake to deny the con-
stitutionality of its action. Id.

VII. Where Congress has so acted the action taken is in the
exercise of a public function, and the things to be done
and the agencies erected in pursuance thereof can not
be treated as private acts or agencies and thereby
subject to State taxation. Id.

VIII. An agency created by Congress as a means of exercising
its constitutional functions is an instrumentality of the
United States, and as such can not be taxed by a State.
Id.

IX. Where an agency is created and all of the agent's prop-
erty is acquired and owned by the United States for
the purpose of exercising a constitutional right, the
taxation of its property, or the sale or products thereof,
is a taxation of the means employed by the Government
to perform a constitutional function. Id.

CONFLICT OF LAWS-Continued.

X. The means and agencies which Congress may select for the
performance of its constitutional functions must neces-
sarily vary and expand to suit the expanding social,
economic, and political life of the people of the country.
Id.

XI. The power of the courts must be so exercised as to main-
tain the paramountcy of national power within the
sphere of its competence, with due regard to the reserved
sovereignty of the States. Id.

XII. Under the Constitution the United States has no author-
ity to transact anything but public business, and when
it engages, in giving effect to its constitutional powers,
in business which an individual could engage in, it is
nevertheless engaging in a public act. South Carolina
v. United States, 199 U. S. 437, distinguished. Id.
XIII. The authority of the Federal Government is ubiquitous
and, within the limits of its constitutional powers, is
paramount in every State of the Union. Id.

CONSTITUTION.

See Conflict of Laws; Taxes, XXV, XXVI, LII, LXIV.
CONTRACTS.

I. Where a Government contractor is suing for extra costs
of alleged changes in a contract and having kept no
record of the same offers as the only evidence the tes-
timony of an accountant as to the comparative cost of
performance under a contract for a different article, at
a different period, such evidence is not proof of such
extra costs. American Can Co., 1.

II. Plaintiff had a contract with an agent of the United States

Shipping Board Emergency Fleet Corporation operating
certain vessels of the corporation, whereby the Fleet
Corporation was obligated to transport, during the cal-
endar year, certain of plaintiff's lumber, cut exclusively
for the Cuban trade, from a port in the United States to
Cuba, with right reserved by the Fleet Corporation to
terminate same at any time, which right was exer-
cised before the agreed amount had been transported.
Thereafter the Fleet Corporation in writing agreed to
transport such lumber as remained on the dock booked
for shipment, the same having accumulated by reason
of unreasonable delay by the Fleet Corporation in car-
rying out the original contract. At the time of the
subsequent agreement the purchasers in Cuba canceled
plaintiff's contracts, and plaintiff on account of a mora-
torium in Cuba was unable to dispose of the lumber

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