Carpenter v. Jones Cnty.

• Citation: 107 N.W. 435,130 Iowa 494
• Parties: CARPENTER v. JONES COUNTY ET AL.
• Decision Date: 08 May 1906
• Court: United States State Supreme Court of Iowa

130 Iowa 494

107 N.W. 435

CARPENTER

v.JONES COUNTY ET AL.

Supreme Court of Iowa.

May 8, 1906.

Appeal from District Court, Jones County; J. H. Preston, Judge.

Action in equity to enjoin the collection of a tax. Decree for plaintiff, and defendants appeal. Reversed.A. G. Bauder, Co. Atty., and Herrick & Bauder, for appellants.

Park Chamberlain and Jamison & Smyth, for appellee.

WEAVER, J.

On January 1, 1904, and for several years prior to that date one E. E. Snyder, under the business name and style of “The Bank of Olin” was engaged in business as a private banker at the town of Olin in Jones county, Iowa. The nominal and advertised capital invested in the bank was $10,000. On the date named Snyder was apparently solvent, and in listing his property for assessment and taxation for the year 1904 listed his taxable moneys and credits at $11,000. As a matter of fact he was at that time insolvent, his debts and liabilities exceeding in amount the value of his moneys and credits, and in reporting said sum of $11,000, he was actuated by the desire to keep up the appearance of solvency and conceal his real financial condition from the public. Taxes for the year 1904 were duly levied upon said assessment to the amount of about $137, and on December 13, 1904, and while said tax was yet unpaid, Snyder made a deed of assignment to the plaintiff for the benefit of his creditors. An inventory of the insolvent estate disclosed assets not to exceed $150,000 as against an indebtedness to depositors and others of more than $180,000. Upon this state of facts the plaintiff assignee brings this action in equity, alleging that the act of Snyder in returning said sum of moneys and credits for taxation was a fraud upon his creditors, and demanded that the tax levied thereon be declared void, and its collection be permanently enjoined. To this petition the defendants demurred generally and specially. The demurrer was overruled and decree rendered thereon as prayed by the plaintiff, and defendants appeal.

In our judgment this ruling cannot be sustained. We are unable to discover any vestige of actionable fraud in the admitted facts. It is not denied that Snyder had in fact at least $11,000 in moneys and credits. Indeed, it is apparent that he had much more than that sum; and while under our tax laws it was his privilege to have the amount of his bona fide indebtedness deducted from the sum of his moneys and credits, it was nevertheless a privilege which he was not bound to exercise. It may be true that the waiver of this right on his part was a sacrifice to appearances and even though the general public may have been deceived thereby it falls far short of a fraud in law. Prompted by the same motive, one man may indulge in a new dress suit, another may invest in diamonds or fine horses or automobiles, and another may contribute beyond his ability to the campaign fund of his party or to the salary of his wife's pastor, when the money thus expended would be better employed in the payment of his honest debts but whatever may be our estimate of the ethical quality of his conduct in this respect no one will contend that it constitutes a fraud upon his...