This аction is begun to recover taxes which had been paid after the period of limitations had run against their collection. Counsel for plaintiff supports its case by the same line of argument that was presented to this court in Oak Worsted Mills v. United States,
This defense is that the evidence shows that the plaintiff had made a deposit in a bank as a guaranty of the .payment of the taxes in controversy when finally determined. In consideration of this deposit, the bank advised the collector of intеrnal revenue that it would pay the amount of taxes finally determined by the commissioner to be due from the plaintiff, the case was held up until determination had been made, and thereafter when such taxes were finally determined the plaintiff paid the amount thereof and оbtained a release of the deposit. The defendant contends that the principles laid down in the case of United States v. John Barth Co.,
“ * * * The taxpayer was permitted by a bond temporarily to postpone the collection and to substitute for his tax liability his contract under the bond. The object of the bond was not only to prevent the immediate collection of the tax, but also to prevent the running of time against the government.”
Judgment was accordingly rendered against the taxpayer.
It is true that in the ease last cited the bond was filed prior to the time when the stаtute of limitations expired and in the instant case the deposit was made in the bank and the guaranty given of payment after the statute had run against the collection of the tax. We are nevertheless clear that this does not alter the situation, and that the principlеs announced in the John Barth Co. Case, supra, determine the case at bar. In the instant ease, the deposit was made and the guaranty given prior to the enactment of the 1926 act. Conceding for the purposes of the argument only that when the 1926 act was passed, section 1106(a) thereof extinguished the liability for taxes collected after the statute of limitations had run and enabled a suit to be brought to recover the amount paid, it still must be said that the liability existed prior to the enactment of that act. In fact, the passage of section 1106(a) showed that Congress recognized that the liability did exist. This, as we observed in the Gotham Can Co. Case, was in pursuance of the well-known рrinciple — so well established as to need no citation of authorities — that the statute of limitations or other bar against a remedy fоr the collection of a debt does not extinguish the liability therefor.
As the liability for the tax still existed at the time when the deposit was made in the bank for its payment, the contract which the bank made to pay whatever amount might finally be determined to be the tax, was made upоn a valid consideration both as to the plaintiff and the bank. The bank did not, it is true, pay the tax itself as the agreement provided. The plaintiff paid the tax and thereby discharged the liability of the bank. But whether paid by plaintiff or the bank, the result was the same. The collection wаs not made on the ground that a tax was due, but was based on a valid contract to pay a certain amount when it was determined by the сommissioner. The tax fixed the sum to be paid, but the payment and collection was by virute of the contract and not by reason of the tаx liability, and the payment therefore cannot be recovered by plaintiff. ' We hardly think it is necessary to cite authorities to show that thе moral obligation to pay a valid debt is sufficient legal consideration for a subsequent new promise to pay if made either befоre or after the bar of the statute has become complete, and that the new promise based upon such moral obligation is binding upon the debtor and may be shown in avoidance of the statute of limitations. But see the numerous decisions, both state and federal, listеd on this point under section 569, page 1099, of 37 Corpus Juris.
Counsel for plaintiff urge that the waiver which was executed the day following that on which the deposit was made in the bank is invalid, first, because it was executed after the statute of limitations had run, and, second, because it was sо restricted by its terms as not to apply to the conditions in the ease at bar. But these matters do not affect defendant’s right to retain the money paid pursuant to the guaranty. While we have no necessity for considering them, it might be said that in the case of Charles H. Stange v. United States,
Without considering the other questions arising in the ease, we hold that by reason of the deposit and guaranty the plaintiff is not entitled to recover herein and it is ordered that its petition be dismissed.