16 F. Cas. 382 | U.S. Circuit Court for the District of Northern New York | 1863
In the view I take of this case, the motion for an injunction must be denied, without reaching the question of the original liability of the plaintiff to be assessed for such profits of the company as had not been embraced in any dividend declared by it. If the plaintiff's counsel is correct in the position that the profits of an incorporated company, itself an artificial person, are not, in the contemplation of the act of congress, a portion of the gains, profits, or income of the stockholders, until they are distributed as dividends, or embraced in a dividend declared by the managers of the corporation, I think it quite clear that, when a dividend has been declared and has become payable, the mere omission of the stockholder to obtain or receive the dividend subject to his call, would not excuse him from embracing the amount of such dividend in his statement of his taxable income for the year. The bill does not show that no dividend had been declared; and that fact should have been directly and explicitly stated, in order to entitle the plaintiff to an injunction. The bill, in regard to this point, only states that the plaintiff, during the year 1862, never received anything from said incorporated company by way of dividends on his shares, or otherwise. This statement is not necessarily untrue, even if the dividends actually declared on the plaintiff’s stock during that year amounted to the sum of $30,000.
Another objection is, that the plaintiff had a perfect remedy under the statute, and failed to avail himself of that remedy, and that no reason for such failure, of a character to give a court of equity jurisdiction to relieve him, appears on the face of the bill. The wrongful act, if any, of which the plaintiff complains, is the addition of $30,000 made to his income statement by the assistant assessor. If this has not been made in such form and mode as to give the legal right to levy and collect the tax therefor, that objection must be urged in a court of law and not in a court of equity. If made in legal form, the act of congress gives the right of appealing to the assessor, and provides, in substance (section 03), that if the list or return of any party shall have been increased by the assistant assessor, he or she may be permitted to declare, under oath or affirmation, in the form and manner to be prescribed by the commissioner of internal revenue, the amount of his or her annual income liable to be assessed under the act, and that the same so declared shall be the sum upon which duties are to be assessed and collected. In the view that the plaintiff’s counsel takes of this case, the plaintiff could have made the oath thus required, or rather which the law thus permitted him to make, and, if the assessor had refused to strike the wrongful increase from the assessment, the plaintiff could have had his remedy. As the assessor had no discretion, and would have been bound, on the presentation of such an oath, to strike the addition from the assessment, it is probable that the plaintiff might have had a remedy at law by mandamus, if the assessor had refused to perform the duty; and it is certain that, if he would have had no remedy at law, he would have had one in equity. The right to make this oath, and thus to become entitled to have the assessment corrected, must be fatal to the plaintiff’s prayer for relief in this suit, unless his neglect to make such oath be excused by some allegation of fraud, accident, or mistake, giving jurisdiction to a court of equity. It is like the case of a defendant in a suit at law, who has neglected to appear and establish a legal defence in that suit, when he had an opportunity to do so, and has then resorted to a court of equity to set aside the judgment.
It was suggested, on the argument, that the making, of the oath prescribed by the 93d section would not have changed the aspect of the case, because the making of it would
The grounds above stated are fatal to the application for an injunction; for an injunction ought not to be granted, in a case of this kind, unless the plaintiff's right is quite clear, and the granting of the injunction is necessary to protect and secure that right.
