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92 C. Cls.

be final and no court shall have jurisdiction to review such determination."

Petitioners contend that Congress intended to commit to the final determination of the Commissioner only "such matters as findings of fact, computations, and the like." Quite apart from the fact that in Section 601 (d)2 Congress uses virtually the quoted words in limiting review by administrative officers, we fail to see how the argument can aid petitioners here because the record does not show why their claims were denied. Since the record is silent on this point, such decisions as United States v. Williams, 278 U. S. 255, and Silberschein v. United States, 266 U. S. 221, are plainly distinguishable.

We hold that upon this record the determination of the commissioner is final. Thus we see no occasion to narrow the effect of Section 601 (e). The decision of the Court of Claims was correct and must be affirmed.

NEW WORLD LIFE INSURANCE CO. v. THE UNITED STATES

[No. 43549]

[88 C. Cls. 405; 311 U. S. 613, 620]

Income tax; deductions allowable to a life insurance company in respect to investment expenses.

Petition dismissed March 6, 1939; plaintiff's motion for new trial overruled May 29, 1939.

Petition for writ of certiorari denied by the Supreme Court, November 22, 1939. 308 U. S. 612.

Petition for rehearing granted, and the order denying certiorari, supra, vacated, May 20, 1940. The petition for writ of certiorari granted, limited to the second question presented thereby. 310 U. S. 654.

The decision of the Court of Claims affirmed by the Supreme Court December 9, 1940, in an opinion per curiam, as follows:

Per curiam: The judgment is affirmed upon the first ground set forth in the opinion of the Court of Claims with respect to investment expenses, the views expressed on the second question considered by the Court of Claims as to the

Sec. 601. (d) In the absence of fraud, the findings of fact and the decision of the Commissioner of Internal Revenue upon the merits of any claim adjusted pursuant to this section and the mathematical calculation therein shall not be subject to review by any administrative or accounting officer, employee, or agent of the United States.

92 C. Cls.

right of deduction on account of insurance reserves not being an essential basis for the judgment and being contrary to Helvering v. Oregon Mutual Life Insurance Company, No. 564, decided this day (311 U. S. 267).

THE UNITED STATES, PETITIONER, v. COWDEN MANUFACTURING CO., RESPONDENT [No. 44307]

[91 C. Cls. 75; 312 U. S. 34]

Certiorari to review a judgment of the Court of Claims, April 1, 1940, holding that under the "Federal Taxes Clause" of his contract with the Government the contractor was entitled to recover for processing taxes paid by subcontractor and reimbursed to said subcontractor by contractor.

The judgment of the court was reversed January 13, 1941, the Supreme Court deciding:

No obligation is imposed on the United States to compensate contractor for the amount of processing taxes imposed on subcontractors which, by agreement with them, the contractor agreed to bear should such taxes be imposed, by a provision of the contract between said contractor and the Government that the prices set forth therein include any Federal tax previously imposed which is applicable to the materials purchased under the contract, and that "if any sales tax, processing tax, adjustment charge or other taxes or charges are imposed or changed by the Congress after the date set forth for the opening of the bids upon which this contract is based and made applicable directly upon the production, manufacture or sale of the supplies covered by this contract and are paid by the contractor on the articles or supplies herein contracted for, then the prices named in this contract will be increased or decreased accordingly"; the fair import of such provision in said contract between said contractor and the Government being that the United States must make reimbursement only for such taxes as the contractor has paid pursuant to an obligation imposed on said contractor by the statute which exacts the tax.

Mr. Justice Murphy delivered the opinion of the court, as follows:

Respondent seeks reimbursement from the United States of the amounts paid to processors to compensate them for processing taxes paid on cotton goods sold to respondent.

92 C. Cls.

The suit is based on a contract between respondent and the United States rather than on Title VII of the Revenue Act of 1936 (49 Stat. 1648, 1747) which authorizes refunds to processors, under certain circumstances, of processing taxes illegally collected under the Agricultural Adjustment Act (48 Stat. 31). The question is whether the "federal taxes" clause of the contract obligates the United States to make the reimbursement.

Prior to June 6, 1933, the War Department called for bids on a contract to furnish a certain kind of mechanic's suit. On June 6, 1933, respondent submitted its bid, and on June 24, 1933, executed a contract with the United States whereby respondent agreed to furnish a specified number of the suits at a stated price. The contract provided, in the "federal taxes" clause, that: "Prices set forth herein include any Federal Tax heretofore imposed by the Congress which is applicable to the material purchased under this contract. If any sales tax, processing tax, adjustment charge, or other taxes or charges are imposed or changed by the Congress after the date set for the opening of the bid upon which this contract is based and made applicable directly upon the production, manufacture, or sale of the supplies covered by this contract and are paid by the contractor on the articles or supplies herein contracted for, then the prices named in this contract will be increased or decreased accordingly. . . .

To perform its contract with the United States, respondent contracted to purchase cotton cloth, thread, and labels from subcontractors who were liable, as processors, to pay any processing taxes levied on the articles sold to respondent. At the time these contracts were made no taxes were in effect on the processing of cotton, but in anticipation of such taxes respondent and the subcontractors agreed that respondent would reimburse them for any taxes they were required to pay on the processing of goods sold to respondent, the taxes to be billed as a separate item. Thereafter, respondent received the goods covered by these contracts and compensated the subcontractors for the taxes they were later required to pay on the processing of the cotton. It has performed its contract with the United States and now claims that the quoted provision obligates the United States to pay respondent the amounts it has paid its subcontractors to compensate them for the processing taxes they have paid. Because the Comptroller General rejected its claim, respondent brought this suit in the Court of Claims and obtained judgment. 32 F. Supp. 141 (91 C. Cls. 75). We granted certiorari on October 14, 1940, to resolve the uncertainty as to the correct construction of the "federal taxes" clause which appears in a large number of government contracts.

92 C. Cls.

The only question is whether the United States, in the "federal taxes" clause, has agreed to pay respondent the amount respondent paid its subcontractors to reimburse them for taxes paid on the processing of the goods sold to respondent. We hold that it has not.

We are of opinion that the "federal taxes" clause does not obligate the United States to reimburse its contractor for taxes which the latter has borne merely as a matter of contract with its subcontractors. On the contrary, the fair import of the clause is that the United States must make reimbursement only for such taxes as the contractor has paid pursuant to an obligation imposed upon him by the statute which exacts the tax.

The language of the clause is precise. It provides only for reimbursement of those taxes which are "made applicable directly upon the production, manufacture, or sale of the supplies covered by this contract." The supplies "covered by this contract" are the mechanics' suits, the completed articles furnished to the United States. Since the clause further provides in exact language that the tax must be "directly" applicable, we cannot agree that a tax on the cloth, thread, and labels is a tax on the "supplies covered by this contract." Compare Telescope Folding Furniture Co. v. United States, 31 F. Supp. 780, 784 (90 C. Cls. 635); United States v. Glenn L. Martin Co., 308 Ú. S. 62.

Moreover, the clause stipulates for reimbursement of taxes "paid by the contractor." It is reasonable to conclude that this phrase also contemplates payment of taxes to the United States in consequence of an obligation imposed by statute upon respondent. For while in a sense, perhaps, respondent "paid" these processing taxes, it is more accurate to say that they were "paid" by the subcontractors who merely shifted their burden to respondent as a separate item of the contract price. The clause as a whole indicates that this was the sense to be attributed to the phrase quoted.

A contrary construction of the "federal taxes" clause introduces difficulties not contemplated by the parties. It would force them to trace the taxes back to the one upon whom the obligation first rested, whether the subsequent transactions were simple or complex. For if it could be said in this case that the processing taxes were imposed on the supplies covered by the contract and were paid by the contractor, it would be immaterial how far the contractor were removed from the original processor if the former could show that the burden of the tax had been shifted as the processed articles had changed hands and perhaps form. We can find nothing which suggests that the parties intended to draft a clause that would operate in such fashion.

92 C. CIS.

We conclude that the quoted clause does not obligate the United States to compensate respondent for taxes which were paid by its subcontractors and were merely shifted to respondent pursuant to their subcontract. The judgment of the Court of Claims is reversed and the cause is remanded with directions to dismiss the petition. It is so ordered.

THE UNITED STATES, APPELLANT, v. KATE B. GOLTRA AND E. FIELD GOLTRA, JR., EXECUTORS OF THE ESTATE OF EDWARD F. GOLTRA, DECEASED. (No. 191)

KATE B. GOLTRA AND E. FIELD GOLTRA, JR., EXECUTORS OF THE ESTATE OF EDWARD F. GOLTRA, DECEASED, APPELLANTS, v. THE UNITED STATES. (No. 192)

[No. 42696]

[91 C. Cls. 42; 312 U. S. 203.]

On appeal by defendant (No. 191) from the decision of the Court of Claims, April 1, 1940, holding that the decedent, Goltra, was illegally and wrongfully deprived by the United States of his lease and option to purchase certain barges and towboats, and awarding to plaintiffs a judgment in the sum of $350,000 with interest, "not as interest but as a part of just compensation," under a special jurisdictional act, 48 Stat. 1322; and on a cross appeal by plaintiffs (No. 192) from said decision on the ground that the compensation is inadequate because the court failed to consider certain evidence as to the value of the lease or use of the property involved.

On February 3, 1941, the judgment of the Court of Claims was on defendant's appeal (No. 191) modified, and as modified was affirmed; and on plaintiffs' appeal (No. 192) was affirmed, the Supreme Court deciding:

1. The use of the term "just compensation" in a private jurisdictional act directing the Court of Claims to hear, consider and render judgment on the claim of a designated person for just compensation for the vessels taken "for the use and benefit of the United States," and any other legal or equitable claims arising out of such transactions, does not, as in the case of the taking of property under the Fifth

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