205 U.S. 395 (1907), 199, Metropolitan Life Insurance Company

Docket Nº:No. 199
Citation:205 U.S. 395, 27 S.Ct. 499, 51 L.Ed. 853
Party Name:Metropolitan Life Insurance Company
Case Date:April 08, 1907
Court:United States Supreme Court

Page 395

205 U.S. 395 (1907)

27 S.Ct. 499, 51 L.Ed. 853

Metropolitan Life Insurance Company

No. 199

United States Supreme Court

April 8, 1907

of New York v. City of New Orleans

Argued January 31, 1907




Neither the fiction that personal property follows the domicil of the owner nor the doctrine that credits evidenced by notes have the situs of the latter can be allowed to obscure the truth, and personal property may be taxed at its permanent abiding place although the domicil of the owner is elsewhere.

Where a nonresident enters into the business of loaning money within a state and employs a local agent to conduct the business, the state may tax the capital employed precisely as it taxes the capital of its own citizens in like situation, and may assess the credits arising out of the business, and the foreigner cannot escape taxation upon his capital by temporarily removing from the state the evidences of credits which, under such circumstances, have a taxable situs in the their origin. Loans made by a New York life insurance company on its own policies in Louisiana are taxable in that state although the notes may be temporarily sent to the home office.

115 La. 698 affirmed.

The facts are stated in the opinion.

Page 397

MOODY, J., lead opinion

MR. JUSTICE MOODY delivered the opinion of the Court.

This is a writ of error to review the judgment of the Supreme Court of Louisiana which sustained a tax on the "credits, money loaned, bills receivable," etc., of the plaintiff in error, a life insurance company incorporated under the laws of New York, where it had its home office and principal place of business. It issued policies of life insurance in the State of Louisiana, and, for the purpose of doing that and other business, had a resident agent, called a superintendent, whose duty it was to superintend the company's business generally in the state. The agent had a local office in New Orleans. The company was engaged in the business of lending money to the holders of its policies, which, when they had reached a certain point of maturity, were regarded as furnishing adequate security for loans. The money lending was conducted in the following manner: the policyholders desiring to obtain loans on their policies applied to the company's agent in New Orleans. If the agent thought a loan a desirable one, he advised the company of the application by communicating with the home office in New York, and requested that the loan be granted. If the home office approved the loan, the company forwarded to the agent a check for the amount, with a note, to be signed by the borrower. The agent procured the note to be signed, attached the policy to it, and forwarded both note and policy to the home office in New York. He then delivered to the borrower the amount of the loan. When interest was due upon the notes, it was paid [27 S.Ct. 500] to the agent and by him transmitted to the home office. It does not appear whether or not the notes were returned to New Orleans for the indorsement of the payments of interest. When the notes were paid it was to the agent, to whom they were sent

Page 398

to be delivered back to the makers. At all other times, the notes and policies securing them were kept at the home office in New York. The...

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