Shotwell v. Moore

• Decision Date: 05 March 1889
• Citation: 32 L.Ed. 827,9 S.Ct. 362,129 U.S. 590
• Parties: SHOTWELL v. MOORE, County Treasurer. 1
• Court: U.S. Supreme Court

9 S.Ct. 362

129 U.S. 590

32 L.Ed. 827

SHOTWELL v. MOORE, County Treasurer.¹

March 5, 1889.

R. A. Harrison and T. D. Lincoln, for plaintiff in error.

D. A. Hollingsworth and D. K. Watson, for defendant in error.

MILLER, J.

This writ of error to the supreme court of the state of Ohio brings up for review a judgment of that court concerning the taxation by the state authorities imposed upon the plaintiff in error, Stewart B. Shotwell, as the owner of a certain amount of United States legal-tender treasury notes, commonly called 'greenbacks.' The case was tried in the court of common pleas of Harrison county, Ohio, by the court, without a jury, by consent of parties; and that court found the following conclusions of fact and law, under the provision of the state statute, upon which all the subsequent proceedings have been based 'The parties to this cause having waived a jury, the same came on for trial to the court, and the parties, with a view of excepting to the decision of the court upon the questions of the law involved in the trial, having requested the court to state in writing the conclusions of fact found separately from the conclusions of law, and the testimony having been heard, the court finds as conclusions of fact as follows: That the defendant is, and for many years has been, a resident of Harrison county, Ohio. That on the Saturday preceding the second Monday of April, in the years 1881, '82, '83, '84, and '85, the defendant had on deposit in bank, at the town of Cadiz, in said county, to his credit as a general depositor, the following sums: In 1881, $30,900; in '82, $26,900; in '83, $29,550; in '84, $18,560; in '85, $4,700. That on said Saturday in each of said years he checked out the said balance so standing to his credit, and at his request the same was paid to him in United States securities, commonly called 'greenbacks.' That on each occasion, after counting the money so paid to him, he inclosed the same in a package, wrote his name thereon, and returned the same to the officer of the bank, requesting him to place the same in the bank's safe for him, which was done. On no occasion did the defendant carry the money out of the bank building; and in the early part of the next week in each of said years he returned to the bank, and demanded his package, which was given him, and he opened the same, and delivered it to an officer of the bank, asking that the amount should be placed to his credit as a general depositor, which was done. That on each occasion the defendant drew out the balance due him with intent to obtain non-taxable securities, and thereby evade taxation on such balance; but that on each occasion during the time which intervened between the withdrawal and the subsequent deposit as a general depositor he was bona fide the absolute owner of the money so withdrawn, and the same was subject to his disposal. That he did not in either of said years list for taxation any part of the money so paid to him, nor did he list the monthly average amount of value, for the time he held or controlled the same within the preceding year, of any moneys, credits, or other effects within that time invested in or converted into the said securities so by him drawn out of bank, and that said monthly average amount so invested by the defendant in such securities within the years, respectively, preceding the drawing out of said moneys, was the amount so drawn out at the end of the year. That the auditor of said county placed said several sums upon the duplicate of said county for the year 1885, except for the year '85 he erroneously placed $4,949, with fifty per cent. added thereto, making $7,420, whereas the data before him, and by which he should have been controlled, authorized only $4,700, which, with fifty per cent. added, would make $7,050; and the court further finds that the amount of taxes chargeable upon the aggregate of said several sums, if the same are subject to taxation, is $2,317.05, and that said duplicate was delivered to the treasurer of said county for collection. lection. And the court being of opinion that, upon the facts so found, the law of this case is with the defendant, it is thereupon considered that the defendant recover of the plaintiff his costs herein expended, taxed at $20.60; to which ruling of the court as to the law of the case and to the judgment so rendered the plaintiff excepts.'

The case was taken by appeal to the circuit court of the state, where the decision of the court of common pleas was reversed, and judgment rendered for the amount of the tax sued for against Shotwell. This was carried to the supreme court of the state, in which the decision of the circuit court was affirmed. 16 N. E. Rep. 470. To review that judgment this writ of error is prosecuted. The error assigned is that the tax levied and enforced by this judgment was upon notes of the United States, which is forbidden by the Revised Statutes of the United States in the following language: 'Sec. 3701. All stocks, bonds, treasury notes, and other obligations of the United States shall be exempt from taxation by or under state or municipal or local authority.' And that the supreme court of Ohio erred in holding that section 2737 of the Revised Statutes of the state, passed June 20 1879, to take effect January 1, 1880, is not in violation of, nor repugnant to, the section above quoted. It is not controverted by counsel for defendant in error that under the United States law the greenbacks were not subject to taxation, or that if the Ohio statute, when properly construed, authorizes such taxation, it is to that extent invalid. But the question presented to us for consideration is whether the tax levied in this case by the authorities of the state was a tax upon the legal-tender notes issued by the government in the hands of Shotwell.

It is conclusively shown by the finding of facts that prior to the day to which the assessment of property for taxation relates by the laws of Ohio, Shotwell had in his bank, on general deposit, subject to his order, at the town of Cadiz, in the county of Harrison, in the previous years of 1881, 1882, 1883, 1884, and 1885, the sums of money on which the taxes here in controversy were assessed; but it is claimed by him that, a day or two previous to that fixed by statute, he had, in each of those years, drawn out the balance of his general deposit account on a check, and, in each case receiving the amount of it in legal-tender notes, had put them into a package, which he inclosed in an envelope, and placed with the bank as a special deposit, writing his name thereon, and requesting the bank to put it in its safe for him, which was done. Arguing from the proposition that the assessment for an entire year, under the laws of Ohio, must be made on the particular day mentioned in the statute, and that these greenbacks were his property on that day, it is insisted, with great earnestness by counsel, that the amount of the package thus on special deposit on that day could not be taxed by the state authorities. To this general proposition there does not appear to be any valid objection if the thing done had been in the ordinary course of business, and the conversion of his general deposit in the bank into a private package of greenbacks, exempt from taxation, were free from illegal purpose or fraudulent motive. But since it is found as a matter of fact that the whole transaction was made for the purpose of evading taxation on the amount of his general deposit on the day it was exchanged for greenbacks, and that there was no purpose of permanently changing the amount of the deposit in the bank subject to his order, and, as such, liable to taxation, it is argued by counsel that it was a fraud upon the revenue laws of the state of Ohio. For all of the years mentioned the same process was gone through with, and in every instance, within a week after the assessment, the plaintiff in error took the same greenbacks...