(3) The Commissioner's certificate that assessment should

be under sec. 210 is binding in the absence of evidence impeaching his conclusion; and the taxpayer is entitled to

recover the overpayment so found by the Commissioner. 2. There are clear and important differences between the provisions

for special assessments made by sec. 210 of the Revenue Act of 1917, and those made by sec. 327 (d) of the Revenue Act

of 1918. Mr. JUSTICE CARDOZO delivered the opinion of the Supreme Court.

UNITED STATES v. MEMPHIS COTTON OIL CO.

[75 C.Cls. 195; 288 U.S. 62]

Certiorari to review a judgment for overpayment of income tax.

Judgment was rendered in favor of the plaintiff in the court below. Upon certiorari the judgment was affirmed, January 9, 1933, the Supreme Court deciding : 1. A claim for a tax refund which has been seasonably filed, but

which fails to conform to Treasury Regulations in that it omits to state the grounds upon which the refund is demanded, may be amended by specifying the grounds at any time before the claim in its original form has been finally rejected, though it be after the time when a wholly new claim would be barred by limitation.

So held under sec. 1318, Revenue Act of 1921, as amended March 4, 1923, which provides that no suit for recovery shall be maintained in any court until a claim for refund has been duly filed with the Commissioner“ according to the provisions of law in that regard and the regulations of the Secretary of the Treasury established in pursuance thereof"; where the regulation required that “all the facts relied upon in support of the claim should be clearly set forth under the oath"; and where the claim, originally exhibiting only the taxpayer's statement of amounts of net income, tax, previous payments and overpayment, was amended, before its final rejection on that ground, so that it set forth in detail the facts showing overassessment as they had been revealed by the Bureau's own

investigation, 2. Rulings as to what amendments of pleadings may (or may not)

by relation avoid the bar of an intervening limitation, and as to what, in that connection, is but a revised statement of the same

cause of action and what the substitution of a new one, furnish helpful analogies, though subordinate to administrative considerations, in dete ining the effect of an amendment of a

claim for refund before the Commissioner. 3. To give effect by relation to the amendment here in question har

monizes with the Commissioner's practice of reauditing returns when refunds are claimed (Lewis v. Reynolds, 284 U.S. 281), and particularly with his action in entertaining the original claim (instead of rejecting it promptly for defect of form), examining completely the taxpayer's business, and announcing

that the overassessments so found would be rectified. 4. The function of a statute limiting the time within which claims

may be presented is to give protection against stale demands; the function of a regulation making provision as to the form of claims is to facilitate research; the line dividing the two

functions should be kept a sharp one. 5. Notice by the Deputy Commissioner to a taxpayer that his claim

for refund would be rejected and that the rejection would be officially announced in a schedule to be approved thereafter,

held, not a final rejection. Mr. JUSTICE CARDOZO delivered the opinion of the Supreme Court.

INDEX DIGEST

ADMINISTRATIVE DECISIONS.

See Contracts, VIII, XI, XX, XXIV; Pay, VI; Taxes IV.
ADMIRALTY JURISDICTION.

I. In any form of remedy, legal or equitable, an insurer can

take nothing by subrogation but the right of the
assured; and where the assured, by reason of nonresi-
dence, may not sue, jurisdiction may not be estab-
lished by making a resident insurer the party plaintiff.

Sanday & Co., 370.
II. The jurisdiction of the district courts of the United States

under the suits in admiralty act is exclusive, and the
Court of Claims is without jurisdiction of a suit brought
by a nonresident alien, notwithstanding under the suits
in admiralty act the district courts might also be with-
out jurisdiction, due to loss of merchant vessels and
cargo and lack by the suitor of residence or principal

place of business in the United States. Id.
ARMY PAY.

See Pay, VII, X; Rental and Subsistence Allowances, VIII, IX.
ASSIGNMENT.

See Patents, X.
BAILMENT.

I. Where a party contracted to manufacture booster casings

for the Government the material for which was to be
furnished by the Government, the transaction was a
bailment of the material furnished, and title to the
scrap material resulting from their manufacture, and
to any surplus material furnished, remained in the

Government. National Metal Moulding Co., 194.
II. Where perishable goods, properly prepared, are delivered

to the Government for cold storage, for compensation,
the Government becomes a bailee for hire, and the
spoiling of the goods raises a presumption of negli-
gence, the burden of overcoming which rests upon the

Government. Compton, 278.
BREACH OF CONTRACT.

See Contracts, V, VII, XVIII, XXVI, XXVII, XXIX.
BURDEN OF PROOF.

See Bailment, II; Fraud, II; Taxes, IV.
COMPROMISE.

A compromise is valid if the parties considered the subject matter

of the compromise doubtful, irrespective of whether the matter

was in fact doubtful in legal contemplation. Presumption of
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COMPROMISE-Continued.

knowledge of law cannot be relied upon to invalidate a compro-
mise of a claim by showing that the person asserting the claim

had knowledge of its invalidity. Trumbull Steel Co., 391.

See also Contracts, XIX; Taxes, XII, XIII, XIV.
COMPROMISE SETTLEMENT.

See Taxes, XII, XIII, XIV.
CONGRESSIONAL REFERENCE.

I. Where the subject matter of a claim referred to the

Court of Claims by resolution of one of the Houses of
Congress is such that under existing law the court has
jurisdiction to render a judgment in the case, the case

will be so treatedFarmers and Ginners Oil Co., 294.
II. Where a judgment by the Court of Claims in favor of the

plaintiff in a case has been transmitted to Congress,
and Congress by special enactment "remands" the
case to the court for the taking of additional testimony
and a report of the facts established, the proceedings
in pursuance thereof are akin to those under a congres-
sional reference under section 151, Judicial Code.

Pocono Pines Assembly Hotels Co., 334.
CONSTRUCTION OF STATUTES.

See Congressional Reference, II; Contracts, XVII; Patents, X;

Pay, I; Sesquicentennial Expenses; Taxes, VIII.
CONTRACTS.

I. Where a construction contract authorizes the Govern-

ment contracting officer to make changes, such author-
ity does not extend to an unnecessary substitution of
method and equipment for method and equipment
theretofore approved by him and sufficient to do the

work. Pope, 64.
II. Where a Government contractor, under requirements of

his contract, makes excavations according to lines and
grades fixed by the contracting officer, payment to be
based thereon, and such lines and grades are erroneous
and are subsequently corrected, the contractor is
entitled to the additional expense of changing the
excavation, and claim therefor is not one for damages.

Id.
III. A Government contractor is not relieved of responsibility

for defective work by the mere fact that the perfor-
mance of the work was under governmental supervision

and inspection. Id.
IV. In order to establish misrepresentation of the subsoil

materials of a contract site in drawings furnished pro-
spective bidders disclosing the result of borings, it must
appear that the borings shown by the drawings were