Savings & Loan Soc. v. Multnomah County

• Decision Date: 19 February 1894
• Docket Number: 2,062.
• Citation: 60 F. 31
• Parties: SAVINGS & LOAN SOC. v. MULTNOMAH COUNTY et al.
• Court: U.S. District Court — District of Oregon

60 F. 31

SAVINGS & LOAN SOC. v. MULTNOMAH COUNTY et al.

No. 2,062.

United States Circuit Court, D. Oregon.

February 19, 1894

Milton W. Smith, for plaintiff.

John H Hall, for defendants.

BELLINGER District Judge.

The complainant is a California corporation, and has a large amount of money loaned in this state upon the security of real-estate mortgages. These mortgages are recorded in Multnomah county, but are alleged to be without the state, in the possession of the complainant, in the city of San Francisco. It is alleged that, in obedience to a custom long established, all the real estate in the county, and all mortgages upon such real estate, were each assessed for the year 1892 at 50 per cent. of their cash value; that thereafter the state board of equalization arbitrarily, and for the purpose of discriminating against mortgages, and especially against the mortgages of the complainant increased the assessment upon lands to 65 per cent. of their cash value, and increased the assessment of mortgages to 100 per cent. of such value; that such assessment subjects mortgages to a greater tax, proportionately, than lands are subjected to, and is grossly out of proportion to the values involved; that the sheriff threatens to sell the lands mortgaged and the mortgages of the complainant, and will do so unless restrained by order of the court. To this complaint a demurrer is filed, upon the ground that it does not state facts which entitle the complainant to the relief prayed for. By the laws of this state, mortgages upon real property within the state are declared to be, for the purposes of assessment and taxation, real estate, and are taxable within the county where the mortgaged lands are. This statute has been upheld by the supreme court of the state in Mumford v. Sewall, 11 Or. 70, 4 P. 585, where it is held that the state may tax real-estate mortgages where the mortgaged land lies, without regard to the domicile of the owner, or the situs of the debt or note secured thereby. This court held the same way in the case of Dundee Co. v School Dist., 19 F. 359. In that case, Judge Deady, referring to the question of the situs of the property taxed, said:

'The maxim so much relied on by the plaintiffs--that personal property follows the person of the owner--is but a legal fiction, invented for useful purposes, and must yield whenever the purposes of convenience or justice make it necessary to ascertain the fact concerning the situs of such property. In cases of attachment and for purposes of taxation it is constantly disregarded, as the following cases will show: Catlin v. Hull, 21 Vt. 153; People v. Commissioners of Taxes, 23 N.Y. 225; People v. Home Ins. Co., 29 Cal. 533; Green v. Van Buskirk, 7 Wall. 150. And the case of State Tax on Foreign-Held Bonds, 15 Wall. 300, cited and also much relied on by plaintiffs, only decides that a state law which comes between the foreign lender and the local borrower, and compels the latter to pay a portion of the interest due the former on his debt, as taxes to the state, is void because it impairs the obligation of the contract between the parties; and this same ruling could as well have been made on this ground if the parties had both been citizens of the state seeking to impose the tax.'

Without reference to the statute which provides that mortgages of land shall, for the purposes of assessment and taxation, be deemed to be real estate, the right secured by mortgage attaches to the land. It has no other locality,--no extraterritorial existence. If the right follows the person of the owner, then it must be enforceable where the person is, without regard to the location of the mortgaged premises since a right which is not enforceable in a particular locality cannot be said to have a legal existence there. This principle is contained in the...