Security Sav. Bank v. Carroll

• Decision Date: 19 October 1906
• Citation: 109 N.W. 212,131 Iowa 605
• Parties: SECURITY SAVINGS BANK v. C. D. CARROLL, Treasurer of Linn County, Iowa and LINN COUNTY, IOWA, Appellants
• Court: Iowa Supreme Court

109 N.W. 212

131 Iowa 605

SECURITY SAVINGS BANK v. C. D. CARROLL, Treasurer of Linn County, Iowa and LINN COUNTY, IOWA, Appellants

Supreme Court of Iowa, Des Moines

October 19, 1906

Appeal from Linn District Court.--HON. J. H. PRESTON, Judge.

SUIT in equity to enjoin the county treasurer from enforcing an assessment of property made under section 1374 of the Code. There was a judgment for the plaintiff on demurrer to an amendment to the petition and to the answer to the original petition. The defendants appeal.

Reversed.

Voris & Haas, for appellants.

Dawley Hubbard & Wheeler and Cooper, Clemons & Lamb, for appellee.

OPINION

SHERWIN, J.

In December, 1903, the appellant, C. D. Carroll, as treasurer of Linn county, listed and assessed against the appellee, as agent for others who were not named, moneys, loans, and credits alleged to have been omitted from taxation for the years 1899 to 1902 inclusive. The plaintiff in this action seeks to restrain the treasurer from collecting, or attempting to collect, the tax so assessed by him. By an amendment to the petition the plaintiff also seeks to restrain the appellant from making a proposed similar assessment for the year 1903. The original petition alleged that the board of supervisors of the county employed the firm of Fleener, Schleicher & Martin to assist the county treasurer in attempting to discover property omitted from taxation in said county: that on or about the 7th day of November, 1903, said firm, for the purpose of extorting from the plaintiff any information it might possess as to property owned by others, not in any way in the possession or under the control of plaintiff as agent, made a report to the defendant treasurer that the plaintiff had in its possession and under its control as agent for other parties, not naming them, moneys, loans, and credits that had been omitted from taxation for the years 1899 to 1902 inclusive, aggregating over $ 2,000,000; that on November 10 1903, defendant gave to the plaintiff notice of said report and of a proposed assessment thereon; that, at the time said report was made and filed, said firm had no evidence that appellee had in its possession or under its control, as agent, moneys, loans, and credits belonging to other parties, and the same was based solely on surmise and conjecture, and the said Carroll, at the time he sent appellee the notice, knew that said firm had no evidence of the truth of the matters set forth in the report and notice. The petition further alleges the filing of written objections to the listing and assessing of said property, and a denial by appellee that it had in its possession, or under its control, for other parties, property liable for taxation for said years; that said Carroll, on the 1st day of December, 1903, listed and assessed against plaintiff as agent for others the property alleged to have been omitted from taxation for said years; that at said time no evidence was offered or furnished to said defendant upon which said listing and assessing could be based, and the same was so listed and assessed on surmise and conjecture; that no evidence was offered or produced to show that plaintiff was acting as the agent of any person; that there was no evidence to show that plaintiff had in its possession or under its control any moneys, notes, credits, or personal property belonging to other persons, with a view of investing the same for pecuniary profit for plaintiff or the owner; that no evidence was offered showing the name of any person owning such personal property. The defendant demurred to this petition, and, the demurrer being overruled, he answered, admitting some of the allegations of the petition, but denying that the report of Fleener, Schleicher & Martin was based solely upon surmise and conjecture; denying that the defendant acted without evidence and upon surmise alone in listing and assessing the property, and without evidence that the plaintiff was acting as agent and had in its possession moneys and other personal property belonging to other persons, for the purpose of investment; denying that there was a lack of evidence showing the names of the persons to whom the property belonged. The answer affirmatively alleges "that plaintiff had in its possession and control as agent for others, nonresidents of Iowa unknown to defendants, moneys and credits, holding the same for pecuniary profit, and omitted from taxation" for the years for which it had been assessed by the defendant. After the filing of this answer the plaintiff filed an amendment to its petition assailing the proposed assessment of property omitted in 1903 for substantially the same reasons given in the original petition. Appellant's demurrer to the amendment to the petition was overruled, and thereafter appellee demurred to the answer and the demurrer was sustained. The defendant elected to stand on his demurrer to the amendment to the petition and on his answer to the original petition, and the relief asked by the plaintiff was granted.

The defendant having appealed from the ruling on his demurrer to the amendment to the petition as well as from the ruling on the plaintiff's demurrer to his answer, all of the questions raised by the plaintiff in his original petition are practically before us for determination notwithstanding the affirmative averment of the answer which the demurrer admits.

The important and controlling question in this case is whether the assessment made by the treasurer was absolutely void or erroneous only. If illegal and void, its collection may be enjoined in equity even if there be a tribunal provided for reviewing the same. It is only in case where the tax is irregular or erroneous that the remedy by appeal is exclusive; where the tax is void, the party is not obliged to appeal or proceed by certiorari... Barber v. Farr, 54 Iowa 57, 6 N.W. 134; Powers v. Bowman, 53 Iowa 359, 5 N.W. 566; Rood v. Board, 39 Iowa 444; C. M. & St. P. Ry. Co. v. Phillips, 111 Iowa 377; Layman v. Telephone Co., 123 Iowa 591, 99 N.W. 205.

The appellee contends that the assessments made by the defendant as treasurer, were illegal and void, and made without authority of law for the following reasons: An agent cannot be assessed for the tax on property of his principal. An assessment against the property of a nonresident must be made in the name of the property holder and not in the name of the agent. Before the agent can be made personally liable for the tax, the fact of agency must exist, and there must be evidence showing same and the existence of property subject to taxation which is held by the agent for pecuniary profit. It is further said that the assessment was based on fraud and conspiracy, and made for the purpose of extorting information from the appellee. Code, section 1316, provides that "any person required to list property belonging to another . . . shall list it as if it were his own, but he shall list it separately from his own giving the assessor the name of the person or estate to which it belongs." And Code, section 1320, is as follows: "Any person acting as the agent of another, and having in his possession or under his control or management any money, notes and credits, or personal property belonging to such other person, with a view...