Court Opinion

ID: 4495431
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:19.602795+00
Date Added: 2024-06-11T08:49:27.344659
License: Public Domain

*501OPINION.
Seawell:
In filing the stipulation of facts, the parties thereto reserved the right to object to the relevancy or materiality of any facts set forth therein either upon trial or on argument. On brief counsel for the petitioner contends that only so much of the stipulation of facts as relates to the time and place of incorporation of the petitioner and the Delaware corporation; the acquisition of assets and assumption of liabilities of the petitioner by the Delaware corporation ; the dates on which the returns of the petitioner were filed; *502the date on which the deficiency notice was sent; the officers of the Delaware corporation in 1929 and 1930; the making of jeopardy assessments in 1930 for the taxable years; and the amount paid on the assessments, are material and relevant, and moves that the remaining facts having to do with audits, conferences, waivers, including the circumstances under which they were filed, etc., all of which have some bearing on the estoppel question, be stricken from the record as immaterial and irrelevant. The motion is denied.
The statutory period of limitation for assessment of the deficiencies for the respective taxable years expired March 16, 1929, and May 15, 1929, dates prior to the mailing of the deficiency notice. Sec. 277 (a) (1) and (2), Revenue Act of 1926. Whether the deficiency notice was timely depends upon the sufficiency of the several waivers to extend the time for assessment. The contention of the petitioner is, in substance, that the instruments relied upon by the respondent are not its waivers, but waivers of the Delaware corporation, a taxpayer separate and distinct from it. The respondent relies upon equitable estoppel.
In Dickerson v. Colgrove, 100 U. S. 578, the Court said:
The estoppel here relied upon is known as an equitable estoppel, or estoppel in pais. The law upon the subject is well settled. The vital principle is that he who by his language or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or injury by disappointing the expectations upon which he acted. Such a change of position is sternly forbidden. It involves fraud and falsehood, and the law abhors both. This remedy is always so applied as to promote the ends of justice. It is available only for protection, and cannot be used as a weapon of assault. It accomplishes that which ought to be done between man and man, and is not permitted to go beyond this limit. It is akin to the principle involved in the limitation of actions, and does its work of justice and repose where the statute cannot be invoked. * * *
In a later case, Stone v. Bank of Commerce, 174 U. S. 412, the same Court remarked:
An equitable estoppel which is to prevent the State from receiving the benefit of an exercise of its power to alter the rule or rate of taxation for all the time of the existence of a business corporation, should be based upon the clearest equity. It is fitly denominated an equitable estoppel, because it rests upon the doctrine that it would be against the principles of equity and good conscience to permit the party against whom the estoppel is sought to avail himself of what might otherwise be his undisputed rights. * * *
The Court of Claims, in Naumkeag Steam Cotton Co. v. United States, 2 Fed. Supp. 126; certiorari denied, 289 U. S. 749, after reviewing the authorities on the question of estoppel, said:
The doctrine of equitable estoppel is predicated upon the fact “ that it would be unconscionable to permit a person to maintain a position inconsistent with one in which he has acquiesced or of which he has accepted any benefit.” If a *503person is induced by another’s acts and conduct to do what he would not otherwise have done, or, as is said, if he abstained from doing what he would have done, the person inducing such conduct may not suddenly change his attitude to the injury of the other.
In Lucas v. Hunt, 45 Fed. (2d) 781, Hunt, formerly president of a corporation and one of its liquidators in dissolution proceedings, signed a waiver extending the period for assessment of taxes against the corporation after the expiration of the statutory period of three years within which the officers could legally act for the corporation. In its decision estopping Hunt from denying the validity of the waiver, the court remarked:
* * * We are of opinion that Hunt by signing the waiver estopped himself to question its validity, with the result that he was bound to respond to the assessment to the extent of funds in his hands which belonged to the dissolved corporation taxpayer. The circumstances all show that the commissioner relied on the waiver and is therefore entitled to claim the equitable estoppel asserted by counsel in his behalf.
In other cases the courts have estopped taxpayers from denying the validity of waivers on which the Commissioner relied. Loewer Realty Co. v. Anderson, 31 Fed. (2d) 268; Liberty Baking Co. v. Heiner, 37 Fed. (2d) 103; Trustees for Ohio & Big Sandy Coal Co. v. Commissioner, 43 Fed. (2d) 182; Commissioner v. New York Trust Co., 54 Fed. (2d) 463; Wonder Bakeries Co. v. United States, 6 Fed. Supp. 228; Warner Collieries Co. v. United States, 63 Fed. (2d) 34.
• The returns of the petitioner for 1924 and 1925 were filed and audited under the name of “Addressograph Company.” Notwithstanding the change of its name in 1921 to “ Illinois Addressograph Manufacturing Co.” and the organization at that time of the “Ad-dressograph Company ” under the laws of Delaware, the petitioner, directly or through its attorney in fact and counsel in these proceedings, held numerous conferences with representatives of the respondent respecting the correct tax liability of the petitioner; received letters from the respondent with reference thereto; and filed refund claims and letters of protest on proposed deficiencies with the respondent, all under its original name. True it is that the return of the petitioner for the period January 1 to June 12, 1921, showed a change of its name, yet thereafter the petitioner, in numerous ways, indicated willingness to have its tax liability for 1926 and prior years determined under its original name. Such notice of a change of corporate name is not controlling. Warner Collieries Co. v. United States, supra.
The Delaware corporation was not organized until 1927, and had no tax liability to adjust or pay for 1924 and 1925, the years involved here. Harvey, who signed the petitioner’s return for 1925 *504as assistant treasurer and who occupied the same position with the Delaware corporation, is charged with knowledge of this fact. If it were Harvey’s intention to furnish the respondent 1924 and 1925 waivers of the Delaware corporation, instead of the petitioner, it would, indeed, be difficult to conclude that the transaction was free from fraud. Clearly, the use of the seal of the Delaware corporation was a mistake. In any event, the statute requires only “ consent ”, Liberty Baking Co. v. Heiner, supra; Loewer Realty Co. v. Anderson, supra; and corporate waivers without seals have been held to be valid. Pictorial Printing Co., 12 B. T. A. 1407; reversed on other grounds, 38 Fed. (2d) 563; Panther Rubber Manufacturing Co., 17 B. T. A. 310. Cf. Panther Rubber Manufacturing Co. v. Commissioner, 45 Fed. (2d) 314.
The waivers were furnished by the petitioner for the purpose of obtaining extensions of the periods of limitation; they were relied upon by the respondent for that purpose; and the petitioner received and accepted the benefits of the waivers. Under the circumstances, we think it would be unreasonable to allow the petitioner to repudiate the instruments. See Fidelity Storage Corporation, 18 B. T. A. 517, and Charles S. Rauh, 22 B. T. A. 662.
Beviewed by the Board.

Decision will be entered for the respondent.