Royal Indemnity Co. v. United States

A collector of internal revenue, who had accepted a surety bond filed with him by a taxpayer to accompany his claim for abatement.of income tax, consented to termination of all liability upon the bond and surrendered it before its obligation was fully satisfied. The questions for decision are whether the collector had power to release the obligation of the bond and, if not, whether the United States is entitled to interest on the amount of its claim against the surety.

Upon the Commissioner’s assessment in 1920 of additional income taxes in the sum of $29,128, asserted to be düe from the…