Finch v. The County of York

• Decision Date: 19 January 1886
• Citation: 26 N.W. 589,19 Neb. 50
• Parties: ALBERT E. FINCH, PLAINTIFF IN ERROR, v. THE COUNTY OF YORK, DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

26 N.W. 589

19 Neb. 50

ALBERT E. FINCH, PLAINTIFF IN ERROR, v. THE COUNTY OF YORK, DEFENDANT IN ERROR

Supreme Court of Nebraska

January 19, 1886

ERROR to the district court for York county. The action was brought by plaintiff to recover taxes for 1881 paid by him under protest. Judgment below before NORVAL, J., dismissing the action.

AFFIRMED.

France & Harlan, for plaintiff in error, cited: Cooley Taxation 14-16. Hoyt v. Commissioners, 23 N.Y. 224. Lyman v. Fiske, 17 Pick. 234. Story Confl. Laws, 39, 42, 46.

Scott & Gilbert, for defendant in error, cited: Jones v. Seward County, 10 Neb. 154. Goldgart v. People, 106 Ill. 27. People v. Gardner, 51 Barb., 352. Wilcox v. Ellis, 14 Kan. 601. People v. Trustees, 48 N.Y. 390.

OPINION

REESE, J.

For the purpose of this decision it may be conceded that the plaintiff in error was a citizen of the state of New York until the 4th day of July, 1881. In the month of April, 1880 he came into the county of York, in this state, remaining until July of the same year. When he came to York county he brought with him a large sum of money, and while there loaned it to citizens of York county, taking notes and mortgages therefor to secure the payment of the same. In the month of May he returned to New York, but left his notes and mortgages, and all his interests connected with the money brought by him to this state, in the hands of agents in York, giving them authority to collect in the money as it became due, and to reloan it on mortgage security, and, as stated in the stipulation of facts on which the case was tried in the district court, "in fact transact for him a regular loan business, and report from time to time" to the plaintiff. In the month of July, 1881, he determined to make York county his future home, and did so. Neither the money, notes, or mortgages were at any time withdrawn from York county. The notes and mortgages in the sum of $ 3,700.00 were assessed by the assessor of York precinct in the year 1881. The same property was assessed and taxed in the state of New York for the same year, and the taxes paid by him. The question here presented is, was the property taxable in York county?

The power of the state to tax all property within its own limits must be conceded. For the purposes of taxation and the collection of revenue the state possesses all the attributes of sovereignty, and its power to tax property within its borders is ample and unlimited. But that power is limited to the persons and property within its jurisdiction. Ordinarily the situs of moneys and credits follow the domicile of the owner, and if he lives in one state, and has money owing to him from citizens or residents of another state, the state of his residence, only, has the power to tax such credits. And it has been held that where the credits were represented by notes and mortgages, and such notes and mortgages were not in his immediate possession, but were deposited in the state where the debtor resided for payment or collection, yet they were not taxable there for the reason that the notes and mortgages are not the debt itself, but the evidence of it, and the debt followed the owner. People v. Eastman, 25 Cal. 601. Appeal Tax Ct. v. Patterson, 50 Md. 354. Latrobe v. Baltimore, 19 Md. 13. The tax is not on the money, the land on which the security is taken, nor upon the paper upon which the promise and security are written, but upon the chose in action, or right to collect the debt. State v. Earl, 1 Nev. 394. Desty on Taxation, 330. Cooley on Taxation, 43.

But the power of the legislature to separate, for purposes of taxation, the situs of personal property, whether of a tangible nature, or in the form of choses in action, from the domicile of the owner is unquestioned, and if such property, in any form, is within its jurisdiction it may tax it. Swallow v. Thomas, 15 Kan. 66. Tappan v. Bank, 86 U.S. 490, 19 Wall. 490, 22 L.Ed. 189. Griffith v. Carter, 8 Kan. 565.

Our attention is directed to section one of article nine of the constitution of this state, entitled "Revenue and Finance," with the suggestion that the section in itself does not provide for taxing the money or credits of non-residents, and that a fair construction would limit the power of the legislature to the taxation only of citizens of the state, and especially the money, mortgages, and notes of residents only. The essential elements of this provision are that the legislature shall provide such revenue as may be needful by levying a tax by valuation, so that every person shall pay a tax in proportion to the value of his property. As we read it, no words of limitation, so far as residence is concerned, can be found; and as the constitution is generally understood to be a limitation of the powers of the legislature and the people, and not a grant, we conclude the powers of the legislature upon this question are untrammeled. We then look to the statute. Section one of chapter 77 of the Compiled Statutes of 1885, being the chapter on revenue, is as follows: "The property named in this section shall be assessed and taxed, except so much thereof as may be in this chapter exempted. First. All real and personal property in this state. Second. All moneys, credits, bonds, or stocks, and other investments, the shares of stock of incorporated companies and associations, and all other personal property, including property in transitu to or from this state, used, held, owned, or controlled by persons residing in this state. Third. The shares of capital stock of banks and banking companies doing business in this state. Fourth. The capital stock of companies and associations incorporated under the laws of this state."

Referring to the first clause of the above enumeration we find the language broad and comprehensive. All real and personal property in this state (exemptions excluded). If personal property is in the state, that is, has its situs here, so as to come under the jurisdiction of the state, it "shall be assessed and taxed." Unless this provision is limited by what follows in the second clause it would seem that our inquiry in that behalf might go no further. But does the second clause place a limitation on the first so far as moneys, credits, etc., are concerned, limiting it to persons "residing in this state?" We think it does to the extent that such property must be either "used, held, owned, or controlled" by residents. It may be either. But not as claimed by plaintiff in error that the "owner must be a resident of the state." The second clause of the seventh section of the same chapter, in providing the manner in which property shall be listed, directs that the person listing his property "shall also list all moneys and other personal property invested, loaned, or otherwise controlled by him as agent or attorney, or on account of any other person or persons, company, or corporation whatsoever, and all moneys deposited to his order, check, or draft, and credits due from or owing by any person or persons, body corporate or politic, whether in or out of the county." This provision was evidently intended to reach such cases as the one at bar. The agent must list all property of the kind specified, as such agent. It is immaterial whether the debtor resides in or out of the county in which the agent resides. If he loans or otherwise controls the property, money, or credits he must list it.

The adjudications upon this question in this country have been substantially uniform, holding that if the money or credits are in the hands of an agent for the purpose of using controlling, or investing, they have a situs at the residence of the agent if the principal be a resident of another state. We make the following quotations from some of the decisions: In Goldgart v. The People, 106 Ill. 25, in discussing the question here under consideration, it is said: "If the owner be resident in this state there is jurisdiction over his person and over his...