The opinion of the court was delivered by: ABRUZZO
This action was instituted by the plaintiff to recover from the defendants the sum of $ 6,298.15 paid to the United States Government for manufacturers' excise taxes. 26 U.S.C.A. § 3403(c).
The three individual defendants are co-partners doing business under the firm name and style of Sal Metal Products Company. All transactions by the plaintiff with the defendants were had with the defendant, Samuel Goldman, who represented the other individual defendants. All of these defendants will hereinafter be referred to as the defendant.
A chronological survey of the plaintiff's claim reveals that prior to June, 1946, the plaintiff, a New Jersey corporation, purchased automobile jacks from a Regal Tool & Machine Company of Newark, New Jersey, which maintained quarters in the same premises with the plaintiff. Regal never charged the plaintiff with the manufacturers' excise tax. Regal became bankrupt. In June, 1946, Apel and Budlong, president and vice president of the plaintiff, met with Samuel Goldman at his office in Brooklyn, New York, and discussed the manufacture of automobile jacks by the defendant for the plaintiff. They agreed on a price of $ 2.50 per jack, plus the manufacturers' excise tax of 5 per cent to be paid by the plaintiff and which was to be billed as a separate item. Plaintiff claims that at this meeting it was agreed that if the plaintiff could procure a ruling from the Internal Revenue Service that the jacks were not taxable items, the defendant would procure a refund of the tax and would return it to the plaintiff.
In November, 1946, the defendant purchased the tools, machinery and equipment of Regal. Further negotiations were held between the plaintiff and Goldman which led to an agreement evidenced by a letter dated January 14, 1947, (Plaintiff's Exhibit 1) which reads as follows:
'39-53 Long Avenue Hillside, N.J.
'Telephone Elizabeth 2-9323-4
'Attention Mr. Sam Goldman
Dear Mr. Goldman: 'In reply to your letter of January 13, 1947 with reference to the price of Jacks that you are to supply us with, we hereby confirm the price of $ 2.50 per Jack complete, plus a 5% Federal excise tax, terms less 2% 10th proximo, excluding excise tax. 'Under our contract with the Regal Tool & Mfg. Co., Inc., the taxes were absorbed by them, but ...