Overpayment

“ With this background of analogy, we reach the specific problem that calls for answer here. The respondent filed a claim for taxes overpaid, a claim for money had and received to his use by the agents of the government. The identity of the cause of action may be said in one aspect to depend upon the mere fact of overpayment, the existence of a net balance owing to the taxpayer after the ascertainment of all items of debit and of credit. ”

“ For either purpose a comparatively small sum is required, while the level premium company must pile up tens of millions of overpayments to cover the requirements of the principle on which it conducts its business. ”

“ Evidently the remaining forty per cent constitute the fortunate class who live and pay. As a reward they are to receive not only their own overpayments, but the overpayments of all the unfortunate who have died and the poverty stricken who have lapsed. Forty per cent of the policy-holders, that is, are to get, not only their own "dividends," but the "dividends" of the sixty per cent, who get none. ”

“ The first, $10,874.64, is the overpayment for 1918, as it stood before it was applied upon the partnership assessment. The second, $2,628.26, is the overpayment for 1919. The writ of certiorari brings up the second item to the exclusion of any other. ”

“ With respect to these beneficiaries, as in all other cases involving overpayments, Congress has given the Secretary explicit mandatory instructions. Those instructions require him to recognize that any case in which "more than the correct amount of payment has been made" involves a factual event that cannot be ignored. ”

“ Anticipating that there will inevitably be many occasions on which such a payment is more or less than the correct amount, Congress directed the Secretary to prescribe regulations outlining the procedure for remedying overpayments and underpayments.
In the vast majority of cases, these procedures are uncontroverted. We deal today only with a narrow category of disputed cases in which claimants assert rights designed to protect specially disadvantaged beneficiaries. Respondents, like the plaintiffs in Califano v. Yamasaki, 442 U.S. 682, 99 S.Ct. ”

“ Yet, as Congress foresaw, recoupment of other overpayments may entail much more serious difficulties for the statutory beneficiaries. The Secretary's "netting regulations" cover brief 2-month discrepancies, like the examples invented by the majority, but the regulations also authorize netting over multi-year periods, as was done with respect to the actual respondents in this case. The regulations may thus provide a form of rough justice in 97 percent of the netting cases, but that ratio in no way excuses the injustice that is apparent in true hardship cases. ”

“ This proposition depends, of course, upon the relative frequency of overpayments and underpayments. The majority assumes that the two occur with equal frequency, an assumption for which it offers no support. One might indeed make precisely the opposite assumption: that the Government errs in its own favor more often, and more substantially, than it errs in favor of beneficiaries.↑ See, e.g., 42 U.S.C. §§ 402 (a) , 402 (j) (1982 and Supp. V) ; 42 U.S.C. § 1382 (c) (1) (1982 ed., Supp. V) .↑ It is, of course, of no importance that Yamasaki predates Chevron U.S.A. Inc. ”

“ Since the Act reasonably bears the Secretary's interpretation that netting is permitted, only one issue remains: Respondents contend that the manner in which the regulations provide for netting to be conducted is arbitrary and capricious, because of their definition of the netting period. Overpayments are netted with underpayments up to the "month [of] the initial determination" of error. 20 CFR § 416.538 (1989) . "Initial determination" is a term of art meaning the Secretary's formal determination that an error was committed. ”

“ Property has been long set aside for the payment of that debt to its utmost farthing. My father felt that while that money remained unpaid there was a brand on himself and his family, and he has wrought, wrought as few men have wrought, to pay off, not only that, but other obligations of a sacred character. Many a bill of exchange, the proceeds of his labour, has he sent to old creditors who were in need of what he owed. ”

“ Well, if I have to go to prison and there work to pay the uttermost farthing, heaven nerve my arm so that I may meet and pay my obligations while I am in the flesh. I know that in relation to these matters some of us have been in the habit of considering, "Well, it is a brother to whom I owe this debt, and I can put him off, he will bear with me, and if he begins to make any particular demonstration towards collecting it, I will twine around him, and say, 'Bear with me a little, and I will pay you,'" when perhaps we have no real, firm and fixed determination to pay that debt at all. ”

“ On the contrary, when I shall come to propose a loan, there is not a man of you to whom I shall not hold out at least a job in every part of the subscription, and an usurious profit upon every pound you devote to the necessities of your country. Do I demand of you, my fellow-placemen and brother-pensioners, that you should sacrifice any part of your stipends to the public exigency? On the contrary; am I not daily increasing your emoluments and your numbers in proportion as the country becomes unable to provide for you? ”

“ This is what government has uniformly done in its proposals for raising money.—Were I to desire any sum to be lent me without interest, offering as a compensation or premium an annuity for a given term, or an advantageous contract; the proposal would not be accepted, unless the annuity or the contract was worth the sum to be lent; and I should make myself a debtor to the purchaser for the very thing which I sold to him.—The absurdity would be the same, if instead of borrowing without interest, I should in the same way borrow at a low interest. ”

“ Officers being entitled to halfpay, such as choose to emigrate, should have provisions &c allowed them as above & quarterly notes with interest for three years full pay to commence & be computed from the time they begin their march, in full discharge of all such half pay. As I have already observed that it may be objected depreciations & other payments have been made good; but can a just debt be equitably discharged by certificates of very small comparative value, or depreciated paper money? Certainly no, consequently the States are still bound to make good the deficiency. ”

“ The custom of keeping the spare cash reserved for immediate use or against contingent demands, in the hands of a banker, and making all payments, except small ones, by orders on bankers, is in this country spreading to a continually larger portion of the public. If the person making the payment, and the person receiving it, keep their money with the same banker, the payment takes place without any intervention of money, by the mere transfer of its amount in the banker's books from the credit of the payer to that of the receiver. ”

“ But, sir, the punctuality of the payment has produced of late great inconveniencies; for there has been frequently a necessity of removing men from one ship to another; and it is the stated rule of the pay-office, to assign every man so removed his full pay. These men, when the government is no longer indebted to them, take the first opportunity of deserting the service, and engaging in business to which they are more inclined. ”

“ To pay it voluntarily, to pay it at all except under protest, to pay it under any circumstances whatever but those of legal necessity, is to give Chancellors of the Exchequer that encouragement: much more to pay it in a conspicuous and ostentatious manner, at beat of drum, so to speak, as the gentleman settles his just accounts in A New Way to Pay Old Debts. ”

“ When a debt becomes due and the debtor is unable to pay his creditors, or has no effects to deposit, he shall himself, or his wife, or his children, live with the creditor as a bond-slave or slaves until redeemed by the payment of the debt. ”

“ The borrower runs in his own debt. Has a man gained any thing who has received a hundred favors and rendered none? Has he gained by borrowing, through indolence or cunning, his neighbour's wares, or horses, or money? There arises on the deed the instant acknowledgment of benefit on the one part, and of debt on the other; that is, of superiority and inferiority. The transaction remains in the memory of himself and his neighbour; and every new transaction alters, according to its nature, their relation to each other. ”

“ The pressure put on a debtor who does not pay when payment is demanded is admirably effective. All the men of the creditor's place come and sit, bringing their wives with them, in the debtor's premises; the debtor lights his fire and cooks food for them; if the payment is not forthcoming they stay over night, go home next morning, and after a while repeat the visit. The debtor's neighbours and friends pity him and help him with food and money, till he scrapes enough together to pay the debt. ”

“ They were snapped up at once at a sum that was fabulous in comparison with their real value. This, with what he had brought home and the bonus he received on landing, exactly covered his indebtedness to the man who was to have been his father-in-law; and, when he turned away from the window where he had been telegraphing the money to his lawyer in a far State with instructions to pay the [30] loan at once, he had just forty-six cents left in his pocket. ”

“ The exact and precise requirement is that all employers, whether natural or artificial persons, paying their employees in 'coupons, scrip, punchouts, store orders, or other evidences of indebtedness,' shall redeem the same at face value in money, if demanded by the employee or a bona fide holder on a regular pay day or at any time not less than thirty days from issuance (§ 1) , and that, if payment be not so made upon such demand, the owner may maintain a suit on such evidence of indebtedness, and have a money recovery for the face value thereof, in any court of competent jurisdiction (§ 2) . ”

“ Thousands of them—millions, if there be so many—are doubtless honest in intention. But I am unable to reconcile with any ideal of integrity a change in the law which will permit a man who has borrowed a hundred dollars to pay his debt with a hundred dollars each one of which is worth only half as much as each dollar he received from the lender. ”

“ In the previous spring a lawyer, whom he had consulted on the state of his affairs, described him in a professional letter as having ‘used the utmost of his endeavours to raise money for the payment of his debts, without success.’ Having vainly tried to raise enough money for the mere payment of his debts, he may well have despaired to raise enough for the satisfaction of his creditors, and his own subsistence to the end of his days. ”

“ But whilst I would abolish imprisonment and should like to see the English workman paying his way like his German brother, whilst I am eager to see the poorer classes freed from the misery that debt and extravagance brings upon them to-day, yet no one, I hope, recognises more clearly than I do the sacred duty of a debtor to pay an honest debt. Every penny that he can save after his first duties of maintenance of wife and family should be devoted towards the repayment of debts. ”

“ Cities and towns often voted a bonded debt upon themselves for improvements, for the express purpose of providing employment for the workers, so that business might derive some temporary advantage by having the wages expended in their midst. The great masses of the people did not realize that a part of the same dollars they borrowed most go back to the lender to pay interest, and that the consequent deficiency in the means of payment could only be met by transferring to the creditor a portion of the wealth created by their labor equal to the interest. ”

“ Borrowing and over-spending are among human frailties. They are also forms of risk-taking or gambling. Who knows whether the banker who promises to pay on demand will be alive and doing business next week when his promise to pay is presented for settlement? When the promise to pay is issued by a government which decides the value of currency, and accepted by that government as payment for taxes and other obligations, it is more readily acceptable than paper issued and guaranteed by an individual money lender or banker. ”

“ After 'resumption,' how much money will the people have with which to transact business, employ labor, enter into new enterprises, and use 'cash payments' instead of 'inflating credit' to a ruinous degree, as in times past, under the system of specie payments, and convertibility by law? ”

“ There shall be no privileged class of creditors. Official salaries, pensions, bonds, and all other debts and obligations, public and private, shall be discharged in the legal-tender money of the United States, strictly according to the stipulations of the laws under which they were contracted. ”

“ The debtor carried a growing burden while the creditor harvested an unearned increase. Persons who lived on fixed salary or income profited by the fluctuations, but commercial transactions were made more difficult for the debtor. ”

“ The man who has purchased any article—say a horse—on credit, at one hundred dollars, when there are two hundred millions circulating in the country, if the quantity be reduced to one hundred millions by the arrival of pay-day, will find the horse but sufficient to pay half the debt; and the other half must either be paid out of his other means, and thereby become a clear loss to him, or go unpaid, and thereby become a clear loss to his creditor. ”