44 Opinion of the Court the Soviet Union will make any such payment in the future. Thus, the plaintiff says, the breach of contract of the United States with the plaintiff is proved by the fact that the Soviet Union continues to use the plaintiff's patents and processes and does not pay the plaintiff for their use. This proves, the plaintiff says in effect, that our Government breached its statutory and contractual obligation to "fully protect" the plaintiff when it made its deal with the Soviet Union. What the Government did, in fact, in the direction of protecting the plaintiff, was to require the Soviet Government to enter into Article IV of the Mutual Aid Agreement, which article was quoted and incorporated in the plaintiff's licensing agreement with the Government. That Article, which we have quoted in finding 9, seems to us to amount to a promise by the Soviet Government to compensate the American owner of a patent which the Soviet Government was using, if it continued to use the patent after the United States ceased to pay the patent owner out of Lend-Lease funds. The requirement that the Soviet Government agreed to do this has not, in fact, resulted in the plaintiff's being paid, because the Soviet Government has failed to perform its promise. Did the taking of the promise by our Government at the time the plant was transferred to Russia "fully protect" the plaintiff, as Section 7 of the Lend-Lease Act, incorporated in the plaintiff's licensing agreement, required? In attempting to answer the question just posed, it is necessary to consider what steps Congress might have had in mind, in imposing, in Section 7 of the Lend-Lease Act, upon the officers of the Government the duty to "fully protect" the rights of American patent holders. One effective way to protect them would have been to require the foreign. government, the recipient of the Lend-Lease aid, to deposit money or property by way of pledge to secure its performance of its obligation, in this case evidenced by Article IV of the Mutual Aid Agreement between the United States and the Soviet Union. We feel sure that Congress did not contemplate the requirement of the deposit of such security. The purpose of Lend-Lease was to assist our hard-pressed allies by transferring to them things which they could not Opinion of the Court 118 C. Cls. afford to buy and pay for. They would not, then, have been expected to have resources which they could deposit as a pledge in the United States to secure their performance of their promises of post-war contingent payments. The plaintiff has not been able to suggest what step it thinks the agents of the Government should have taken, but neglected to take, to protect the plaintiff's rights. It says that the Government's obligation "did not fall far short of indemnification" of the plaintiff for future use of its patents and "know-how." But if the obligation fell short at all of indemnification, what did it contemplate? As to indemnification, we think it is clear that Congress did not intend that. Section 7 relates to the agreements expected to be made between the United States and foreign governments. It says that in such agreements the officers of the United States shall fully protect the rights of American patent owners. The protection, then, was to be accomplished in the agreement, or in connection with it. Here, for instance, the pledge which we have mentioned could have been required. But the agreement of our Government, in this case with the Soviet Union, would have been no place to insert a guaranty by the United States that it would, after the termination of Lend-Lease, go on paying royalties to an American patent holder for the use of his patent by the Soviet Union. We conclude, then that Congress did not, by Section 7, require the Government to agree to indemnify the plaintiff against the Soviet Union's default. It required, what was really the only practical thing to do in the circumstances, that the Government take from the Soviet Union its promise to pay the plaintiff royalties if it continued to use its patents after the termination of Lend-Lease. Section 7 was, of course, applicable to all of the countries eligible for LendLease assistance. Congress would naturally have expected that these allies of ours would, after the war, do what they had agreed to do and would hence have regarded the taking of their promises as a sufficient guaranty of performance. The plaintiff, when it licensed our Government to ship its patented devices and disclose its "know-how" to Russia, was as fully aware as was our Government that there were no 44 Syllabus means, other than diplomatic, to induce or compel the Soviet Union to do what it agreed to do. The findings show that our Government has done all that could usefully be done by those means, though its efforts have borne no fruit. We conclude that the United States has not breached its contract with the plaintiff and that the plaintiff's petition must be dismissed. It is so ordered. HOWELL, Judge; WHITAKER, Judge; LITTLETON, Judge; and JONES, Chief Judge, concur. KARL JOSEPH ERTLE, RAYMOND CHARLES JENNE, CHARLES FRANCIS STEWART, LEONARD CHRIS BENDER v. THE UNITED STATES [No. 49610. Decided November 7, 1950. Plaintiffs' motion for new trial overruled February 6, 1951] On Defendant's Demurrer Income tax; failure to file claim for refund of penalty assessments; jurisdiction.-Under Section 3772 of the Internal Revenue Code (26 U. S. C. 3772) the failure to file with the Collector of Internal Revenue a claim for refund of taxes or penalty assessments paid under protest bars any right of recovery in the United States Court of Claims. Internal Revenue 2024 Same; claim for abatement filed prior to payment not compliance with statute.-The filing with the Collector of Internal Revenue of claims for abatement of tax paid under protest, which claims for abatement were denied prior to the payment of the penalty, cannot be construed as being a compliance with the statute which requires the filing of a claim for refund within a stated period after payment. Mr. K. J. Ertle for the plaintiffs. Mr. John A. Rees, with whom was Mr. Assistant Attorney General Theron Lamar Caudle, for the defendant. Mr. Andrew D. Sharpe was on the brief. Opinion of the Court 118 C. Cls. The facts sufficiently appear from the opinion of the court. JONES, Chief Judge, delivered the opinion of the court: This is a suit to recover $18,643.51 alleged to have been paid on February 24, 1950, to the Collector of Internal Revenue at Cleveland, Ohio. The petition alleges that the collections were made as the result of penalty assessments against all of the plaintiffs jointly, under the authority set out in Section 2707 (b) and Section 1718 (c) of the Internal Revenue Code; that the amount was paid under protest and was accepted by the Collector accompanied by a receipt from the Deputy Collector to the effect that the payment was made under protest and in no manner affecting defenses which have been or may be raised to the payment of said penalty assessments. The plaintiffs further allege that they did not at any time willfully neglect or fail to collect, truthfully account for or pay over any of the taxes which are the subject matter of these penalty assessments involved. The petition, however, does not allege that plaintiffs or any of them at any time filed a claim for refund of the amount of the tax penalty. The defendant demurs to the petition on the ground that the failure to file a claim for refund bars any right of recovery in this Court. The applicable provision of the Internal Revenue Code is as follows: SEC, 3772. SUITS FOR REFUND. Limitations. (1) Claim.-No suit or proceeding shall be maintained in any court for the recovery of any internal revenue 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 wrongfully collected until a claim for refund or credit has been duly filed with the Commissioner, according to the provisions of law in that regard, and the regulations of the Secretary established in pursuance thereof. We have no choice but to sustain the demurrer. The provision of the statute is plain. The filing of a claim for refund is an essential condition to the maintenance of a suit to recover amounts claimed to have been illegally collected. 57 Syllabus United States v. Felt & Tarrant Manufacturing Company, 283 U. S. 269, 272; Wisconsin National Life Insurance Company v. United States, 70 C. Cls. 433, 438; Pacific Mutual Life Insurance Company v. United States, 71 C. Cls. 164, 167; Dixie Margarine Co. v. United States, 81 C. Cls. 944, 948, certiorari denied, 297 U. S. 712. We quote from the Felt & Tarrant Manufacturing Company case, supra, the following: The filing of a claim or demand as a prerequisite to a suit to recover taxes paid is a familiar provision of the revenue laws, compliance with which may be insisted upon by the defendant, whether the collector or the United States. The decisions in the other cases cited are to the same effect. The plaintiffs insist that the filing with the Collector of Internal Revenue of claims for abatement in regular form which claims for abatement were denied prior to the payment of the penalty made it useless for the plaintiffs to file a claim for a refund. We cannot construe the protest and claim for abatement made prior to the payment of the tax as being a compliance with the plain wording of the statute which requires the filing of a claim for a refund within a stated period after payment as being sufficient to confer jurisdiction upon this Court which it does not otherwise possess. The demurrer is sustained and plaintiff's petition dismissed. HOWELL, Judge; MADDEN, Judge; WHITAKER, Judge; and LITTLETON, Judge, concur. HERMAN E. YAZEL AND MYRTLE F. YAZEL v. THE UNITED STATES [No. 47895. Decided December 5, 1950] On the Proofs Eminent domain; just compensation for land damaged by river floods; evidence. In a suit to recover damages for the loss of certain of their lands and damage to portions thereof alleged to have been the result of the Government's construction of a levee on |