Leavell v. Blades

• Decision Date: 29 November 1911
• Citation: 141 S.W. 893,237 Mo. 695
• Parties: LEAVELL v. BLADES, Collector.
• Court: Missouri Supreme Court

141 S.W. 893

237 Mo. 695

LEAVELL v. BLADES, Collector.

Supreme Court of Missouri, Division No. 1.

November 29, 1911.

1. TAXATION (§ 98)—PROPERTY SUBJECT TO— NOTES HELD ELSEWHERE.

Under Rev. St. 1909, § 11337, requiring notes, etc., held by a resident in another state and taxable under the laws of Missouri to be assessed in the county of his residence, and under section 11351, requiring a taxpayer to make oath that he has not sent notes, etc., outside the state to avoid taxation, a note held by a resident of Missouri in Alaska, evidencing a debt created and payable in Alaska and secured by land there, never having been in Missouri, is not taxable in such state.

2. STATUTES (§ 225)—CONSTRUCTION—LEGISLATIVE INTENT.

A new law should be construed in the light of previous enactments, and the mischiefs sought to be remedied.

3. WORDS AND PHRASES—"FICTION OF LAW."

A "fiction of law" is an assumption or supposition of law that something which is or may be false is true, or that a state of facts exists which has never really taken place.

Appeal from Circuit Court, Montgomery County; Sam. Davis, Special Judge.

Action by Henry S. Leavell against Leslie E. Blades, collector. From part of the judgment, plaintiff appeals. Reversed and remanded.

John M. Barker, for appellant. Harry C. Black, for respondent.

LAMM, J.

Injunction to restrain the collection of taxes. Plaintiff, from birth a citizen of Missouri and resident of Montgomery county, at spells was in Alaska as a gold digger. The summer of 1906 found him at home in Missouri. Then and there applied to by the assessor of said county for a list of his taxable property, he gave in such list, and thereafter in due time paid the taxes assessed and levied against the property so listed by him. At the time of such listing he told the assessor he had while in Alaska deposited for assay purposes in the Valdez Bank in the town of Valdez, in that territory, $10,000 in gold dust dug in Alaska mines; further, that while in Alaska he had loaned a citizen of that territory like gold dust of the value of $5,000, had taken a note evidencing the loan, and security in the form of mortgage upon a mining claim there, and had left the note and mortgage in said Valdez Bank. Said gold and note were in Alaska at the time of the assessment, and neither the one nor the other had ever been in Missouri. To the list then made out was appended the affidavit prescribed by section 11351, R. S. 1909, which plaintiff signed and swore to before the assessor, of which affidavit more anon. Simultaneously a controversy sprung between the two anent this gold dust and note, plaintiff refusing to list them, and the assessor was of opinion they should be listed. Subsequently, being advised, the assessor included the note and gold dust in the taxable property of plaintiff, and furnished an amended list to the county clerk, including said added items. Thereat taxes were levied against them and spread on the tax books of Montgomery county. Plaintiff unsuccessfully complained to the board of equalization. Afterwards he sought a remedy by certiorari, but was cast because the record of that board did not show sufficient data to grant relief. Thereafter he brought this suit for injunctive relief, charging that the assessment of those items and the subsequent levy of taxes thereon were invalid for the reasons outlined. The chancellor's decree enjoined the collection of the tax upon the gold dust, but refused to enjoin that upon the note. Defendant, collector, stood upon the decree without appeal. Plaintiff appealed in apt time and due form.

There is no dispute on the facts. Those disclosed at the trial are as stated; and the main question here is: Under our revenue laws, is a note belonging to a resident and citizen of this state, but which note never was in this state and which evidences a debt created in Alaska, payable in Alaska by a resident of Alaska, secured upon real property in Alaska and deposited in a bank there, taxable in Missouri? There are other propositions asserted by appellant, but the foregoing is the main one, and others will not be reached unless that one be decided against him.

Our Constitution prescribes (article 10, § 3) that taxes "should be uniform upon the same class of subjects within the territorial limits of the authority levying the tax. * * *" The phrase, "within the territorial limits of the authority levying the tax," attaches itself to the noun, "subjects," as well as to the idea of uniformity; and it may well be that our Constitution makers had in mind that the subjects of taxation should be within the territorial limits of the authority levying the tax. It does not follow that the Legislature might not, if it saw fit, enact a statute making the situs of choses in action, intangible personal property, the same as the domicile of the owner, for taxation purposes. That might be an unjust law in cases easily put, but nevertheless it might be valid law. It is our task, then, to see whether it has done that in so clear and unmistakable a way that there can be no two ways about it. When the tax gatherer puts his finger on the citizen, he must also put his finger on the law permitting it. Not only so, but (if possible) our revenue laws should be so construed that the honest citizen does not bear the whole or greater part of the burden of taxation, and the tax-dodging citizen escape.

Respondent chiefly relies on section 11,337, R. S. 1909. Appellant chiefly relies on section 11,351. Section 11,337 reads: "All personal property of whatever nature and character, situate in a county other than the one in which the owner resides shall be assessed in the county where the owner resides, except as otherwise provided by section 11,355; and all notes, bonds and other evidences of debts made taxable by the laws of this state, held in any state or territory other than that in which the owner resides, shall be assessed in the county where the owner resides; and the owner, in listing, shall specifically state in what county, state or territory it is situate or held." The provision of section 11,351, on which appellant lays main stress, is that part of the oath reading: "* * * And I do further solemnly swear, or affirm, that I have not sent or taken, or caused to be sent or taken, any property, money or bills, bonds or notes, or other securities or evidences of debts, out of this state to avoid taxation. So help me God."

It is a trite and cardinal canon of interpretation of statutes to attend to the state of the old law, the mischiefs arising therefrom, the remedy to be provided, and then to so interpret the new law as to advance the remedy and suppress the mischief. Decker v. Diemer, 229 Mo., loc. cit. 324, 129 S. W. 936. Section 11,337 was enacted in 1881, and, with immaterial (if any) changes, was the law when the assessment was made and when this case was tried. Laws 1881, p. 177. It was approved March 28, 1881. The very same Legislature by its act, approved four days before, amended the sections of the statute relating to lists to be made out by the taxpayer and the affidavit to be made by him, and attached to his assessment list, and those laws as then amended now appear without material change as sections 11,348, 11,351, R. S. 1909. Said affidavit included the clause heretofore quoted from section 11,351.

Attending to the foregoing canon of interpretation, it will be profitable to examine the state of the revenue laws in the particulars in hand, as interpreted by this court prior to the time of said several enactments of 1881 (albeit, always mindful of the dictum of Chief Justice Marshall, viz.: "Judicial power is never exercised for the purpose of giving effect to the will of the judge, but always for the purpose of giving effect to the will of the law"). In 1867, in St. Louis v. Ferry Co., 40 Mo. 580, it was ruled (quoting from one of the syllabi) that "the personal property of a resident actually situated beyond the limits of this state is without its jurisdiction, and cannot be assessed for taxation in this state; but the property of a nonresident is taxable here if it be found situate within the local jurisdiction, whether in the hands of the owner or his agents." The reasoning upon which that pronouncement is rested appears in the following excerpt "In reference to taxation, personal property does not necessarily follow the domicile of the owner, nor does its liability to taxation depend upon his residence merely, but rather upon the local situation—the situs —of the property. Finley v. City of Philadelphia, 32 Pa. 381. The property is subject to taxation in consideration of the protection which it receives from the laws of the place where it is found, and where the owner or his agent is resident." In State ex rel. Taylor v. County Court, 47 Mo. 594, decided in 1871, it was ruled that bonds of a domestic corporation owned by a citizen of Illinois, but in this state for purposes of ancillary administration, were taxable here; that the actual situs of personal property in the domicile of the owner determines under the law in what state it should be taxed. In reaching that conclusion, the court reasoned from the premises that the right of taxing such bonds is predicated on the theory of local protection afforded the property of the owner at the actual situs of the property. Such bonds swell the wealth of the locality, are protected by its laws, and should be subject to its burdens. The doctrine thus announced is rested upon the authority of approved cases in point. Vide, pages 600, 601. The court points out that the dogma that the situs of personal property is the domicile of its owner is fiction, and that local color is given to its truth by the law in relation to the distribution and succession of estates.

Pausing to speak to that view of it, by way of comment, we here observe that a fiction of the law is "an assumption or supposition of law that something which is or...