Jones v. Seward Cnty.

• Decision Date: 18 March 1880
• Citation: 4 N.W. 946,10 Neb. 154
• Parties: JONES v. SEWARD COUNTY.
• Court: Nebraska Supreme Court

10 Neb. 154

4 N.W. 946

JONES

v.SEWARD COUNTY.

Supreme Court of Nebraska.

Filed March 18, 1880.

Error from Seward county.

Norval Bros. & Loveley, for plaintiff in error.

McKillip & Page, for defendant in error.

MAXWELL, C. J.

This case was before this court in the year 1877, but the record being incomplete the case was remanded to the district court, with instructions to direct an issue to be found, and to take proofs and determine to whom the plaintiff's alleged indebtedness was due, the actual amount thereof, and the actual amount of taxable moneys and credits he was possessed of at the time the assessment was made. In conformity with these directions the board of county commissioners of Seward county filed a petition in the district court of that county, alleging that the actual amount of taxable moneys and credits possessed by Jones on the first day of March, 1876, was the sum of $65,000, and that the assessor for that year placed his (Jones') assessment for that year at the sum of $32,245.19, being the amount of moneys and credits possessed and owned by him above all debts which the law authorized him to deduct. To this petition Jones filed an answer, denying all the allegations therein contained inconsistent with his sworn assessment list, a copy of which is attached to the answer. From this list it appears that the whole amount of taxable personal property returned by him amounted to the sum of $643.

A change of venue was had to Hamilton county, where, in the year 1878, a trial was had, the cause being submitted to the court without the intervention of a jury. There are 31 special findings by the court, to nearly all of which no objection is made in this court. The court found that the amount of taxable moneys and credits possessed by Jones over and above all bona fide debts at the time the assessment was made, in the year 1876, was the sum of $11,032, which sum was to be added to the list of personal property returned by Jones, and the treasurer to collect the taxes on the same, and the county to recover costs. A motion for a new trial having been overruled, the plaintiff brings the cause into this court by petition in error. The district court finds that the total amount of deposits on the first day of March, 1876, in plaintiff's bank, was the sum of $94,858.06, of which amount $40,700 was the individual credit of the defendant; that the balance actually due depositors was $54,158.06. The court also finds that on the first day of March, 1876, the plaintiff in error owned United States bonds of the value of $41,650; that the same were ordered to be bought on the twenty-third day of February, 1876; that said bonds were converted into money on the seventh day of March, 1876, and returns received therefrom on the thirteenth of the same month; that the profit of the transaction, after paying all costs and expenses, was the sum of $33. The court also finds that the plaintiff in error “had bought and sold other United States bonds, but at what time and in what amounts the court cannot say.”

It appears from the record that the bonds in question were purchased for the plaintiff on the last day of February, 1876, by the Chemical National Bank of New York, and that they were retained in the possession of the bank until they were sold on the order of the plaintiff, on the seventh day of March of that year. The court finds that these bonds were purchased for the purpose of evading taxation, and for the purpose of avoiding the payment of a just proportion of taxes, and that the purchase in effect was a fraud upon the revenue law. This is the principal error relied on. It appears from the bill of exceptions that the plaintiff is the sole owner of a bank at Seward, known as the State Bank. The amount of capital stock of this bank, if anything, does not appear in the record. Nor is there anything to show that the bank is taxed in any way, except as it may be done through the plaintiff. It is conceded that United States bonds are exempt from taxation, and that money invested in good faith in such securities cannot be taxed. The court below found that the plaintiff did not purchase the bonds in question in good faith. Is this finding sustained by the evidence? We think it is. The plaintiff does not claim that the money was intended by him to remain invested in bonds. On the contrary, it appears from his own testimony that the investment was merely temporary.

It is evident that the investment, if such it can be called, was not made for profit, although there was a small profit; less, however, than the interest accruing thereon during the time he was the owner. The plaintiff appears to have had no communication with the agent purchasing the bonds, the business being done through one of the Omaha banks, and his purchases of United States bonds at other times, so far as appears, were insignificant compared to this. But it is said fraud is never presumed, but must be proved. This is true. But in what manner is it to be proved? Judge Story says: “Fraud, indeed, in the sense of a court of equity, properly includes all acts, omissions and concealments which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.” Story's Eq. Jur. § 187. And, in speaking of the proof, it is said: “On the other hand, neither of these courts insists upon positive and express proofs of fraud, but each deduces them from circumstances affording strong presumptions.” Id. § 190. In but few instances, comparatively, can fraudulent intent be shown by direct testimony, and, therefore, is generally established by circumstantial evidence, and in our opinion the testimony establishes the fact that the bonds in question were purchased by the plaintiff, not with the design of making a permanent...