Opinion of the Court

drawback on the weight basis, notwithstanding the action of the department taken in 1911, and notwithstanding the act of 1913, under which all claims recoverable in this suit, on either basis, must be established. Any claim prior to this act is barred by limitation. When the act of 1913 was passed the ruling of the Secretary upon the question of drawback here involved was in full force and it is to be presumed that Congress was cognizant of it and intended it should continue. In the former suit in this court judgment was rendered because of the earlier ruling of the Secretary and the court gave full effect to his ruling. The instant case does not have the support of that ruling, and left to reach its conclusion free of the Secretary's decision No. 29462 the court is of opinion that the cigarettes upon exportation should take the relative value basis and not the weight basis. See National Lead Co. case, 252 U. S. 140; 53 C. Cls. 635. It was said in this case by the Supreme Court (p. 145): "It does not seem possible that Congress could have intended that two-thirds of the duty should be returned when one-quarter in value of the manufactured product should be exported." See United States v. Dean Linseed Oil Co., 87 Fed. 453, 456.

The uniform practice of the Treasury Department for many years has been to apply the relative value basis. Dean case, supra. The findings show that the plaintiff's claim of drawback was not completed in accordance with the lawful regulations promulgated by the Secretary of the Treasury. Its proof tends to show that it was not completed because of the revocation of the Secretary's earlier decision, it not being deemed worth while to claim drawback on the relative value of the tobacco in the cigarettes to that used in wrappers. It is, of course, recognized that it is the statute and not the decision of the Secretary that gives the right of drawback, but the statute provides that the claim itself be established under regulations which it authorizes to be made. These regulations must be complied with to complete the claim. To prove the contents of a notice of intent to claim a drawback on account of the exportation of cigarettes made

Opinion of the Court

from imported Sumatra tobacco, the proof must meet the requirements of the statute that the imported materials when exported shall be "identified" as well as meet other provisions of the statute and regulations. Proof by secondary evidence of a notice of intent to claim drawback on "Turkish tobacco" does not identify the exported material as being Sumatra tobacco. And in the absence of further and more definite proof it is questionable whether the notice to claim drawback on account of a particular kind of imported tobacco is sufficiently identified by a notice of intent to claim drawback on "imported tobacco and rice paper."

The original notices of intent are not produced because they were destroyed after three years' delay in perfecting the claim, but they were probably all in existence when the plaintiff's other suit was brought, and, as already suggested, no reason has been assigned for the omission of the claim here asserted from that other suit. This case is not controlled by the former one. Another statute, that of 1913, must be looked to, a different ruling of the Secretary must be considered because it revokes a right given, so far as the Secretary's decision could give it, by an earlier decision, and the later decision accords more with the spirit and purpose of the statute. It remains to be said, though unnecessary to a decision of this case, that the jurisdiction of this court attaches upon the refusal of the Secretary or collector to pay a drawback to which the party is entitled upon demand duly made for its payment. The implied contract referred to in the Campbell case, 107 U. S. 407, is predicated upon the application made for the drawback and its refusal. The claim here asserted is only sustainable as one based on a law of Congress, and even formal conditions must be complied with. Rock Island, A. & L. R. R. Company case, 254 U. S. 141.

Our conclusion is that the petition should be dismissed. And it is so ordered.

GRAHAM, Judge; HAY, Judge; DOWNEY, Judge; and BOOTH, Judge, concur.

Reporter's Statement of the Case

GEORGE H. MICHEL, JOSEPH M. MICHEL, JACOB H. REICHERT, AND HARRY S. BITTING, PARTNERS, DOING BUSINESS AS THE PHILADELPHIA MECHANICAL AND ELECTRICAL SCHOOLS AND SHOPS, OF PHILADELPHIA, v. THE UNITED STATES

[No. E-259. Decided March 29, 1926]

On the Proofs

Contract; assignment; set-offs.-In March, 1923, the plaintiffs acquired by assignment a contract with the Government expiring June 30, 1923, to perform vocational rehabilitation services. The services called for were, after the assignment, performed by the plaintiff assignees, for which performance they were underpaid by the Government. At the time of the assignment the Government had overpaid the assignor. On June 26, 1923, the plaintiffs entered into a contract with the Government for like services, terminating June 30, 1924. Held, that the plaintiffs are liable for the amount of the overpayment to the assignor and are entitled to recover the amount of the underpayment to themselves, plus the contract price of the services rendered upon their own contract.

The Reporter's statement of the case:

Mr. Charles H. Breckons for the plaintiffs. Mr. James A. Noecker was on the brief.

Mr. Heber H. Rice, with whom was Mr. Assistant Attorney General Herman J. Galloway, for the defendant.

The court made special findings of fact, as follows:

I. The Philadelphia Mechanical and Electrical Schools. and Shops, of Philadelphia, Pennsylvania, is a partnership composed of George H. Michel, Joseph M. Michel, Jacob H. Reichert, and Harry S. Bitting, having for its principal place of business the city of Philadelphia and State of Pennsylvania. The above-named George H. Michel and Joseph M. Michel having contributed the entire capital of the said partnership, the said partners by written agreement dated the 27th day of October, A. D. 1923, assigned and transferred to George H. Michel all the business and assets of said

Reporter's Statement of the Case

partnership as trustee as collateral security for the moneys advanced by said George Michel for the purpose of the schools purchased in the name of the said Philadelphia Mechanical and Electrical Schools and Shops. The said agreement is attached to the petition, marked "Exhibit A," and is made a part of these findings by reference.

II. On or about the 26th day of June, 1923, the plaintiffs entered into a contract with the United States Veterans' Bureau whereby they agreed to furnish tuition and supplies to persons entitled to training under the vocational rehabilitation act, designated by the United States Veterans' Bureau, upon the terms and conditions set forth in said contract, a copy of which is attached to the petition herein as Exhibit B and is made a part of these findings by reference.

III. The gross amount due the plaintiffs under said contract was and is $11,745.18. But prior to the making of said contract of June 26, 1923, the plaintiffs on or about March 15, 1923, contracted for the purchase of the business, good will, and equipment of the Philadelphia Mechanical and Electrical Schools and Shops (Inc.), a corporation which, prior to that date, was conducting said business and school. At the same time plaintiff's entered into an agreement with the said corporation for the right to use the name, or any part of the name, of said corporation as it desired, and also for the acquisition of the corporation's interest in a contract with the Government, a copy of which, marked "Exhibit E" to the petition, is made a part of these findings by reference. Copies of said agreements of March 15, 1923, just referred to, are set forth in plaintiffs' petition and are marked Exhibits C, D, and F, respectively, and made a part of these findings by reference. The beginning of the contract period in plaintiffs' contract, Exhibit B aforesaid, was July 1, 1923, and was to extend to June 30, 1924.

IV. On or about March 15, 1923, a contract was executed between said corporation and the plaintiffs relative to the protection of the creditors of the corporation and the prevention of possible loss to plaintiff's in connection with said transaction. A true copy of this contract, marked "Exhibit H," is made an appendix to these findings. The plaintiffs

Reporter's Statement of the Case

notified the Government of the change of ownership of said schools by letter dated March 19, 1923, and received a reply thereto dated March 21, 1923. Copies of these letters appear in the appendix to these findings marked, respectively, "Exhibit I" and "J."

V. On or about the 27th day of June, 1922, the said corporation had entered into a contract with the United States Veterans' Bureau, a copy of which is attached as aforesaid to the petition, marked "Exhibit E," and is made a part of these findings by reference. Prior to the contract, Exhibit E, there were two other contracts, similar in character and terms, between the United States Veterans' Bureau, on the one hand, and said corporation, or its immediate predecessor called the Philadelphia Mechanical and Electrical Schools, on the other hand. The latter two concerns were one and the same and were owned and controlled by the same parties, engaged in the same business, and the change of the form of organization from a partnership to a corporation was effected by their own convenience and preference. These two last-named companies or concerns have been paid by the United States Veterans' Bureau an amount of $11,062.89 in excess of the amount that was rightfully due them under their several contracts, and said amount still remains due and unpaid by them to the Government. Of this last stated amount, the sum of $531.72 was an excess amount paid to the corporation by the Government upon the contract of June 27, 1922, being Exhibit E to the petition, as aforesaid.

VI. There was an overpayment to the amount of $531.72 by the Government to the said corporation prior to March 15, 1923, when the plaintiffs took over that corporation's contract, this overpayment being caused by duplication of certain items and overcharges in the bills as presented. Of the plaintiffs' claim herein the amount of $450.32 was a part of the amount due for services rendered by plaintiffs in May and June, 1923, under the said contract of the corporation which it had taken over as of March 15, 1923, and all of which was paid except that this amount of $450.32 has been withheld by the Government. The plaintiffs admit that