Hathaway v. Edwards

• Decision Date: 03 June 1908
• Docket Number: No. 6,450.,6,450.
• Citation: 85 N.E. 28,42 Ind.App. 22
• Parties: HATHAWAY et al. v. EDWARDS, County Treasurer.
• Court: Indiana Appellate Court

42 Ind.App. 22

85 N.E. 28

HATHAWAY et al.

v.EDWARDS, County Treasurer.

No. 6,450.

Appellate Court of Indiana.

June 3, 1908.

Appeal from Circuit Court, Putnam County; P. O. Colliver, Judge.

Action by Helen R. Hathaway and others against John T. Edwards, treasurer of Putnam county, to restrain the collection of certain taxes. From a judgment for defendant, plaintiffs appeal. Affirmed.B. F. Corwin, for appellants. John H. James, for appellee.

COMSTOCK, J.

Appellants commenced this action on the 4th day of November, 1905, to enjoin the treasurer of Putnam county from collecting certain taxes, which had been assessed by the assessor of Putnam county against Helen R. Hathaway, agent for Lucy W. Lee, for the years 1898 to 1904, inclusive. Such assessment was made by said assessor in April, 1905, upon certain notes secured by mortgages owned by the appellant Lucy W. Lee, and the assessment so made by the assessor was, by the auditor of Putnam county, extended upon the tax duplicates and placed in the hands of the treasurer a short time prior to the bringing of the suit. The notes so assessed for taxation were the property of the appellant Lucy W. Lee, a nonresident of the state of Indiana, and the assessment was made against the appellant Helen R. Hathway as agent, upon notice given to Helen R. Hathaway as agent. A demurrer to the complaint for want of facts was overruled, and appellee answered in denial. The cause was submitted to the court for trial, which resulted in a judgment and finding against the appellants, from which judgment the plaintiffs appealed.

The only pleadings filed in the cause were the complaint and the demurrer thereto. The error assigned and relied upon for reversal is the action of the court in overruling the appellants' motion for a new trial. Among the reasons set out in the motion for a new trial are that the decision and judgment of the court is contrary to law, and is not sustained by sufficient evidence. On the trial of the cause it was admitted that the assessor of Putnam county, in the year 1905, gave notice to Helen R. Hathaway, as agent of Lucy W. Lee, that he assessed her, as agent, upon alleged omitted property, for the years 1898 to 1904, inclusive, and that such assessments were extended by the county auditor upon the tax duplicates in the hands of the treasurer of the county, and that the taxes so extended upon said assessments said treasurer was threatening to collect, and that the taxes were extended in the name of Helen R. Hathaway. It was also admitted that the assessments so made, and taxes so extended, were on account of certain notes secured by mortgages upon Putnam county real estate, and that such notes were made payable to and owned by appellant Lucy W. Lee. It is further conceded that Lucy W. Lee was not a resident of the state of Indiana, and had not been during all the time and all the years for which the assessments were made. In 1898 the husband of appellant Lee, General Jesse M. Lee, being about to go to the Philippines, gave said Hathaway authority to manage said business as he had. He had money, which had been saved by himself and his wife, and requested Hathaway to loan it. George Hathaway made loans of money for Lucy W. Lee and her husband, and invested money for them in Putnam and other counties in Indiana. He closed up some loans for them, took all of them in the name of Lucy W. Lee, looked after the abstracts, drew up the papers, and completed the loans at the suggestion of appellant Lee's husband, and retained the notes and mortgages; he collected from the parties who borrowed the money, when due, collected money that belonged to Mrs. Lee on the notes collected, and deposited it in the bank in his own name; that he would dispose of the money as directed; he made new loans out of it, and took notes payable to Lucy W. Lee; when he made loans in the name of Lucy W. Lee, he took notes and mortgages, and kept them among the papers of appellant in a vault at his office of which he had control, and had access to a box of papers for the purpose of getting out notes and making collections when they came due. George W. Hathaway was a brother of the appellant Lucy W. Lee. For many years, and until 1902, he resided and maintained a law office at Greencastle, Ind. Helen R. Hathaway, his sister, has been, for 15 or more years, regularly employed at his office, which is yet maintained. The husband of appellant Lee had knowledge of the loans of money thus being made, for which notes and mortgages were given in favor of Mrs. Lee; that the money loaned in the name of Lucy W. Lee was the joint property of himself and wife, but mainly it belonged to him. The evidence without contradiction shows that Helen R. Hathaway made loans of money for and in the name of her sister, Lucy W. Lee, collected notes due to Mrs. Lee, and that she collected it for General and Mrs. Lee; that she loaned and collected money for Mrs. Lee and her husband, and that she did it under their direction; that she loaned the money for Mrs. Lee as a mere family relationship, without compensation. The notes she took were always secured by mortgage, and these notes and mortgages were by her placed with General Lee's papers, that she had access to them, and had a right to take them out and collect the notes when due, and that she had a power of attorney from Mrs. Lee.

Section 6271, Burns' Rev. St. 1881, provided: “All real property within this state, all personal property owned by persons residing in this state (whether it is in or out of this state) and all personal property within this state owned by persons not residing within this state, subject to the exceptions hereinafter stated, shall be subject to taxation.” Section 6273, supra, provided that “the terms ‘personal estate’ and ‘personal property’ as used in this act shall be construed to include *** all rights, credits and choses in action.” Sections 6297, 6330, Burns' Rev. St. 1881, provided for agents listing property. Section 8410, Burns' Ann. St. 1901 (Acts 1891, p. 199, c. 99, § 3), provides that “all property within the jurisdiction of this state, not expressly exempted, shall be subject to taxation.” Provision is made in this act for agents listing property. Sections 8429, 8458, Burns' Ann. St. 1901 (Acts 1891, pp. 204, 210, c. 99, §§ 19, 48). It also provided that: “Personal property of nonresidents of the state shall be assessed to the owner or to the person having control thereof, in the township, town or city where the same may be, except that where such property is in transit to some place within the state, it shall be assessed in such place.” Burns' Ann. St. 1901, § 8421 (Acts 1891, p. 201, c. 99, § 11). All notes are required to be valued in the schedule (Burns' Ann. St. 1901, § 8460; Acts 1891, p. 212, c. 99, § 50), and that instrument attested by an oath that it “contains a full, true and complete list of property held or belonging to the person making the same.” (Burns' Ann. St. 1901, § 8463; Acts 1891, p. 213, c. 99, § 53). In Buck v. Miller (1897) 147 Ind. 586, 45 N. E. 647, 47 N. E. 8, 37 L. R. A. 384, 62 Am. St. Rep. 436, it is said: “For the purposes of taxation the term ‘personal property’ includes bonds, notes, choses in action, and other evidences of credit. *** The test as to where the right to tax property exists is its place of location and use; the place where, if a security or obligation, it is a credit, not where it is a debit. It is quite immaterial whether the notes or other obligations were executed or were due by residents or nonresidents of the state. *** The property is taxable where it is owned, held, and used in business, and where it is protected by the laws of the community in which it is so held and used. *** It is, of course, quite different, as already many times said, where the property is temporarily in the state, as, for instance, where securities are sent into the state for collection, inspection, safe-keeping, or the like.” It is the claim of appellants that notes and similar credits to those involved in this case, owned by nonresidents, are liable for taxation in this state only in case where such credits are used in connection with a business permanently established in this state, and this claim is based upon the decision in Buck v. Miller, supra, from which we have quoted.

The opinion in the case last mentioned notes the general rule “that the domicile of the owner is the place where, by a legal fiction, his personal property is regarded as having its situs, and where it is subject to tax, that this rule is now departed from in most states as to chattels having a permanent situs in a state other than that of the residence of the owner, and this same departure has been taken in regard to notes and evidences of debt in the hands of an agent of the owner who resides in another state or country, which notes are taken for money loaned, and held for renewal or collection, with a view of reloaning the money, by an agent in the same state, the business being permanent in the hands of the agent.” In the course of said opinion the court say, at page 589 of 147 Ind., at page 648 of 45 N. E. (37 L. R. A. 384, 62 Am. St. Rep. 436): “If, therefore, personal property is used in the business in this state, it will be assessed here, even though the owner may reside elsewhere; and this must be true of credits and moneys, as well as other forms of personal property. A business may be done in buying and selling property and making loans and investments, collecting and reloaning the...