of a distiller to recover the tax on spirits destroyed by fire while in warehouse. The court held in effect that there was no defense to the action, and said that "depositing distilled spirits in a government warehouse did not make them the property of the government, or cause them to be held at the risk of the bailee. The property remained in the distiller, and the risk of loss by fire or any other casualty was consequently his. He and his sureties undertook to pay the government tax upon the spirits in the warehouse within one year, with no exception for any possible contingency." Relief afforded by Sec. 3221 is referred to, and the court says that by that act Congress has provided a way in which a remission of the tax upon distilled liquors, casually destroyed while in the custody of a revenue officer in a bonded warehouse, may be obtained. The provision of such a mode of relief indicates a purpose to exclude any other. Farrell v. United States, See, also, same case, 8 Bissell, 259.

9 Otto, 221.

In a suit on distiller's warehousing bond to recover tax on spirits destroyed by fire in warehouse, it was held that the destruction of spirits by fire while in the warehouse does not constitute a removal, and that the tax was not payable until the expiration of the bonded period. United States v. Peace et al., Circuit Court E. D. N. C., January 11, 1892, Seymour, J., 58 Fed. Rep. 714. This decision overruled by Circuit Court of Appeals, 53 Fed. Rep. 999. See Supreme Court decision in the case of Insurance Companies v. Thompson, 5 Otto, 547, supra.

Where, under Sec. 3221 (formerly act May 27, 1872), the Secretary of the Treasury abated the taxes on spirits destroyed by fire while in bonded warehouse, and an official notice of the abatement had been given to the principals upon the warehouse bond, and they had given notice to their sureties, it was held that no suit could be maintained upon the bond. Its obligation was gone, and both the principal and sureties were discharged. The Secretary of the Treasury might on new evidence, or further consideration, reimpose the taxes. But his reassessment would only subject the spirits and the distillers to a liability for their payment; it could

not restore the obligation of the distiller's warehouse bond. United States v. Alexander et al., 110 U. S. 325.

"Casualty," as used in Sec. 3221, means an accident, — an event not to be foreseen or guarded against. Excessive and unusual summer heat causing the warping of whiskey barrels is not a casualty; neither are undiscovered worm-holes in the barrels a casualty within the meaning of this section: consequently it was held that, where an excessive loss occurred from these causes in a number of packages of spirits deposited in a distillery warehouse, the Commissioner of Internal Revenue had power to instruct the collector to require the withdrawal of such packages, although the bonded period had not expired, and to collect the tax on the amount of spirits originally deposited under the provisions of Sec. 4, act May 28, 1880. Crystal Springs Distillery Co. v. Cox, collector of internal revenue, Circuit Court D. Ky., October 6, 1891, Barr, J., 47 Fed. Rep. 694.

Insurance policy on spirits in bond cover tax, if distiller is liable for tax. Secs. 3221 and 3223 discussed. Hedger v. Union Insurance Co., Circuit Court D. Ky., August 14, 1883, Barr, J., 17 Fed. Rep. 498.

The regulations and instructions governing the abatement of tax on spirits destroyed by fire, see Series 7, No. 7, Revised; Appendix, p. 173 et seq.; also Series 7, No. 14, Revised, p. 24 et seq.

Allowance for leakage. Sec. 3294 a.

Construction of the law relative to abatement of tax on spirits said to have been lost from packages in warehouse. 31 Int. Rev. Rec. 89; 40 ibid. 173, 237.

SEC. 3222. The preceding section shall take effect Retrospective in all cases of loss or destruction of distilled ceding section. spirits as aforesaid which have occurred since January one, eighteen hundred and sixty-eight.

effect of pre

This does not embrace the later amendment made to Sec. 3221 by act of March 1, 1879, Sec. 6, which by its terms is limited to spirits thereafter destroyed, i. e. after the date of the amendment.

lost spirits is

insurance.

SEC. 3223, as amended by Sec. 3, act March 1, 1879 (20 Stat. 327). When the owners of distilled spirits in When tax on the cases provided for by the two preceding indemnified by sections may be indemnified against such tax by a valid claim of insurance, for a sum greater than the actual value of the distilled spirits before and without the tax being paid, the tax shall not be remitted to the extent of such insurance.

See cases of Insurance Co. v. Thompson et al., 5 Otto, 547; and Hedger v. Union Insurance Co., 17 Fed. Rep. 498, quoted in note under Sec. 3221.

SEC. 3224. No suit for the purpose of restraining the assessment or collection of any tax shall Suits to rebe maintained in any court.

strain assessment or collec

tion of taxes.

A bill in equity will not lie to enjoin a collector from collecting an internal revenue tax, although the tax is alleged to be illegal. Snyder v. Marks, 109 U. S. 189.

Mandatory injunction will not be issued requiring a collector to accept an export bond, and allow spirits to be exported after the bonded period has expired without payment of the tax. The issuance of such writ is forbidden by Sec. 3224 R. S. Miles v. Johnson, collector, Circuit Court D. Ky., October 2, 1893, Barr, J., 59 Fed. Rep. 38.

It has been repeatedly decided that neither the mere illegality of the tax complained of, nor its injustice or irregularity, of themselves give the right to an injunction in a court of equity. The government of the United States has provided, both in the customs and in the internal revenue, a complete system of corrective justice in regard to all taxes imposed by the general government, which in both branches is founded upon the idea of appeals within the executive departments. If the party aggrieved does not obtain satisfaction in this mode, there are provisions for recovering the tax after it has been paid, by suit against the collecting officer. But there is no place in this system for an application to a court of justice until after the money is paid.

That there might be no misunderstanding of the universality of this principle, it was expressly enacted in 1867 that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." And though this was intended to apply alone to taxes levied by Congress, it shows the sense of Congress of the evils to be feared if courts of justice could in any case interfere with the process of collecting the taxes on which the government depends for its continued existence. It is a wise policy. It is founded in the simple philosophy derived from the experience of ages, that the payment of taxes has to be enforced by summary and stringent means against a reluctant and often adverse sentiment; and, to do this successfully, other instrumentalities and other modes of procedure are necessary than those which belong to courts of justice. Opinion of Supreme Court by Mr. Justice Miller in the State Railroad Tax Cases, 2 Otto, 613.

See, also, Kissinger v. Beard, 7 Bissell, 60; Alkan v. Bean, 8 Bissell, 83; Kensett v. Stivers, 18 Blatch. 397; 10 Fed. Rep. 517; Keely v. Sanders, 99 U. S. 443; Pullan v. Kissinger, 2 Abbott, 94.

Suits to recover taxes collected under second assessment, burden of proof as to fraud, etc.

SEC. 3225. When a second assessment is made in case of any list, statement, or return which in the opinion of the collector or deputy collector was false or fraudulent, or contained any understatement or undervaluation, no taxes collected under such assessments shall be recovered by any suit, unless it is proved that the said list, statement, or return was not false nor fraudulent, and did not contain any understatement or undervaluation. SEC. 3226. No suit shall be maintained in any court for the recovery of any internal tax alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrong

Suits for recovery of taxes wrongfully collected.

fully collected, until appeal shall have been duly made to the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof, and a decision of the commissioner has been had therein: Provided, That if such decision is delayed more than six months from the date of such appeal, then the said suit may be brought, without first having a decision of the commissioner at any time within the period limited in the next section.

Suit against collector of internal revenue to recover taxes alleged to be unlawfully assessed and collected. Question as to statute of limitations, and right of taxpayer to bring action without first appealing to the commissioner, under Sec. 19, act July 13, 1866 (now Sec. 3226 R. S.). The Collector v. Hubbard, 12 Wall. 1.

This was a suit for the recovery of money paid as an income tax. It appears that a first assessment was made, from which an appeal to the commissioner was taken, who set aside the first assessment and directed the assessor to make a second assessment, which assessment was paid in installments. No appeal from the second assessment was taken. It was held that no suit could be brought, because no appeal was taken from the second assessment, the first assessment having been set aside. What is said in this decision as to commencing suit within six months from the date of the commissioner's decision, or twelve months from the date of the appeal, is no longer applicable, as the law was changed by Sec. 44, act June 6, 1872 (now Sec. 3227 R. S.). Cheatham et al. v. United States, 20 Otto, 85.

This was a suit against the collector to recover tax claimed to have been illegally assessed and collected as tax on succession to real estate (a tax now repealed). Incidentally it is stated in this decision that "no written notice or protest is required of a party paying illegal taxes under the internal revenue laws. He must pay under protest in some form, it is