Simmons v. Aldrich.

the appellant, and this case is remanded to the Circuit Court of Ohio county for a new trial to be had therein, in accordance with the principles herein set forth.

The other judges concurred.

Judgment reversed and cause remanded.

SIMMONS V. ALDRICH.

(41 Wisconsin, 240.)

Lien of tax upon shares - Damages for sale of shares falsely represented to be free from such lien.

The statute of Wisconsin made taxes assessed on shares of stock in National banks a lien on such stock. The defendant sold to plaintiff shares of stock in a National bank upon which was an unpaid tax. Defendant gave plaintiff a written statement purporting to contain all facts affecting the value of the stock, but in which the tax was not mentioned. The tax was paid by the bank. Held, that plaintiff could recover damages of the defendant to the amount of the tax..

A

PPEAL from the Circuit Court for Kenosha county.

In 1871 the plaintiff purchased of the defendant a large amount of the stock of the First National Bank of Kenosha. Before making such purchase, he required the defendant to furnish a statement of every thing affecting the value of such stock; and the latter delivered to him a writing or schedule purporting to be such a statement, but no reference was made therein to the fact, of which the plaintiff was ignorant, that the taxes on such stock for the years 1865 and 1866, imposed under and by virtue of chapter 400, Laws of 1865, had never been paid.

The plaintiff subsequently paid such taxes, or, what is the same thing, they were paid by the bank, pursuant to chapter 23, Laws of 1872, to the amount of $753.

This action was brought to recover damages for the alleged fraudulent concealment by the defendant of the fact that the taxes were unpaid. The cause was tried by the court without a jury, and afterward the judge filed his findings of fact as follows:

Simmons v. Aldrich.

"1st. That the First National Bank of Kenosha is, and at all the times named in the complaint was, a corporation duly organized, existing and doing business in the city of Kenosha, under and by virtue of the act of Congress, in manner and form as set forth in the complaint herein."

(The complaint avers that the bank was organized March 8, 1864, under the act of Congress. It was stated on the argument, and not denied, that there is a clerical error in the date, which should be 1865 instead of 1864. Such is doubtless the fact.)

"2d. That on or about the 23d day of January, 1871, the defendant offered to sell, and did sell, to the plaintiff two hundred and fifty-one shares of the capital stock of said bank, representing a par value of one hundred dollars per share, at and for the sum of twenty-two thousand dollars.

"3d. That prior to said sale, and as one of the inducements thereto, at the special instance and request of the plaintiff, the defendant caused to be prepared a schedule purporting to show the assets and liabilities of the said bank, the condition and value of said assets, the amount of taxes unpaid upon said stock, and all other facts having a bearing upon the value of such stock.

"4th. That the defendant, prior to said sale, did represent to the plaintiff that the said schedule contained and comprehended all the facts affecting the value of the said stock, known to the defend

ant.

"5th. That the plaintiff relied upon such statements and representations of the defendant, in making said purchase of stock.

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6th. That at the time of said sale, the State taxes for the years 1865 and 1866 upon said stock had not been paid, and said stock was subject to the lien of such unpaid taxes for said two years, being one and one-half per cent on the par value of said stock for each of said years.

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7th. That in the year 1867, by virtue of the statute in such case made and provided, and by virtue of the directions of the State treasurer of the State of Wisconsin, the treasurer of the city of Kenosha did spread out upon the tax roll of that city for the year 1867, then in his hands as such treasurer, the names of the defendant and the other stockholders in said bank, the par value of the shares owned by each of them, together with the amount of tax due thereon for the years 1865 and 1866, being one and onehalf per cent on the par valne of such shares for each of said years;

Simmons v. Aldrich.

and that the entire amount of the capital stock of said bank, to wit, $50,000, was so entered upon said tax roll as subject to said delinquent taxes for said years 1865 and 1866.

"8th. That during said year 1867, and while the said tax roll was in the hands of said collector, he (said treasurer of the city of Kenosha) made personal demand upon the defendant for the payment of said delinquent taxes upon said shares of stock then owned by the defendant, which payment was refused.

"9th. That during the year 1867 the defendant was elected president of said bank, and so remained until about the 23d day of January, 1871; and that prior to the time of his election as president, said defendant had been a director in said bank.

10th. That at the time of said sale, the defendant well knew of the existence of said taxes for the years 1865 and 1866, and the amount of the same, and that they had not been paid, and were liens upon said stock.

"11th. That at the time of said sale, and for some time thereafter, the plaintiff was entirely ignorant of the existence of said unpaid taxes.

"12th. That said schedule so prepared by the direction of the defendant did not contain any mention of said unpaid taxes, or any part or portion thereof, nor did the defendant in any way make known to the plaintiff, before said sale, the existence of said unpaid taxes.

13th. That on or about the 15th day of March, 1872, pursuant to chapter 23 of the general laws of the year 1872, the said delinquent taxes for the said years 1865 and 1866, upon the whole capital stock of said bank, to wit, one and one-half per cent upon the par value of said stock for each of said years, were duly paid to the treasurer of the State of Wisconsin by the said National bank, to wit, the sum of $1,500; and that the plaintiff owned the said two hundred and fifty-one shares of said stock at the time of such payment.

"14th. That the said two hundred and fifty-one shares of said stock were at the time of said sale worth $753 less than represented by the defendant, by reason of the existence and non-payment of said taxes for said years 1865 and 1866."

And as conclusion of law from these facts, the court held, "that the plaintiff is entitled to recover of the defendant the sum of $753, with interest thereon from the 15th day of March, 1872, as well as the costs of this action."

Simmons v. Aldrich.

The averments of the complaint correspond substantially with the findings of fact.

Judgment for the plaintiff was entered pursuant to the conclusion of law above stated; and the defendant appealed therefrom.

Winson & Winson, for appellant.

J. V. Quarles, for respondent.

LYON, J. We are satisfied that there was no error in the rulings of the court upon objections to the admission of testimony, or, at least, none which could possibly prejudice the defendant, and that the findings of fact are sustained by the evidence.

The act of 1865, chapter 400, which imposed the taxes in question, is a valid law. It was so held by this court in Van Slyke v. The State, 23 Wis. 655, and in Bagnall v. The State, 25 id. 112; and this ruling has been affirmed by the Supreme Court of the United States. That law makes the taxes which it imposes a lien upon the shares of stock taxed (§ 2); and we are not aware of any subsequent legislation which removed such lien.

Hence, when the plaintiff purchased the stock, it was subject to a lien for the unpaid taxes, and remained subject thereto until they were paid pursuant to chapter 23, Laws of 1872. It requires but little evidence to prove that the stock was lessened in value by the nonpayment of the taxes, in an amount equal to the taxes. And, the taxes having been lawfully imposed, there can be no doubt that the plaintiff or the bank might pay them at any time, if payment thereof was necessary to the maintenance of this action.

Legislation on the subject since 1865 for the purpose of enforcing payment of the taxes imposed by the law of 1865, is of no importance in the case. It is quite immaterial whether such legislation was or was not effectual to accomplish the intended purpose. If not effectual for such purpose, the controlling facts still remain, that when the plaintiff purchased the stock it was subject to the lien for the taxes, and that such taxes were paid pursuant to law.

Peters v. Myers, 22 Wis. 602, illustrated these views, and is a stronger case for the plaintiff. The point there decided is correctly stated in a head-note as follows: "Land conveyed in 1861, with covenant against incumbrances, was subsequently sold for taxes of 1857, reassessed in 1862 under an act of the Legislature of that year, the original assessment being invalid. Held, that there

Simmons v. Aldrich.

was a breach of the covenant, the lien of the tax relating back to the time when the land was entered on the assessment roll, and the aggregate amount of taxes for the year 1857 determined."

It appearing, therefore, that the defendant, when he sold the stock, concealed a fact, known by him and not known by the defendant, which rendered the value of the stock less than it otherwise would have been, and that the difference equals the judgment, it necessarily follows that the plaintiff is entitled to the judgment he has recovered.

By the court.

Judgment affirmed.