The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1871-04-29
Decision of the Supreme Court
in the Assessment Case OF
H. HackfeId 81 Co.

In our issue of March 25th, we published the
points of submission to the Supreme Court, of the
Minister of Finance and H.. Hackfeld s. Co, in rela-
ton to the assessment Of taxes for the year 1870. The
following is the decision of the Court, as delivered by
Chief Justice Allen
By the terms of submission, it appears that the
property of II. Hackfeld & Co., was assessed for
taxation at the sum of 100000, (Six Hundred
Thousand Dollars), whereas they allege that 1t should
have been assessed at the sum of S370, 1921, and
no more. 1t further appears by the submission that
Hackfeld & Co., had money and goods, at the time
of the assessment, in the United States and Europe,
which form a part of the $780, 900, so assessed, and
1t appears further, that they had c-onsignments Of
merchandise, at the time of assessment. in San Fran
cisco, State of California, which was the property of
said firm or their constituents.
The Minister of Finance claims that the said
property and money are part of the assets of the firm,
and form a part of the common wealth of this King
dom and that the money and goods situated in the
United States and Europe, should be legally re-
turned for the assessment of taxation.
The principal question therefore is, whether the
personal property of the firm, namely, money and
goods, which were situated in the United States and
Europe, were legally assessed here, and upon which
q tax has been imposed.
The law imposing taxes on personal properly is in
these words
SECTION 4S3. All personal property of whatever kind,
not subject to special taxes or specially exempted from taxa
ton, shall be subject to an annual tax Of one quarter Of one
per cent. upon the valuation thereof
The term personal property shall be construed to include
all household furniture, goods and chattels, wares and mer-
chandise. all ships and vessels whether at home or abroad. all
moneys in hand and moneys loaned, all mortgages, public
stocks, stock in corporations, and every species OF property
not included in real estate"
1t is contended by the Attorney General, in behalf
of the Minister of Finance, that the assessment was
legal, and cites the case of Bemis and others VS.. the
Aldermen of the City of Boston.
The Court decided that the interest of an inhabi-
tant of the commonwealth of Massachusetts, as a
partner in the property of g firm established and
- - I-r,aacn 80 AL SfnNn % -oh
there. But this decision was made in conformity
with the Statute which is in these words, viz, Z" All
personal estate within or without this State shall be
assessed to the owner in the city or town where he is
an inhabitant, ON the first day of May" In this
case, there was a positive requirement of the Statute,
and which the Court were bound to regard. So in
the case of Dwight and the Mayor and Aldermen Of
Boston, the same principle is regarded. Mr.. Justice
Gray, in giving the decision in this case very prop
erly says, " that the fact the same interest is or may
be taxed in another State, will not justify the Court
in disregarding the positive directions of our own
Legislature" These authorities have no general
application and can have no influence in the decision
of the case submitted to the Court, unless our Statute
is in terms the same as in Massachusetts, which
imposes a tax on a resident for personal property,
whether situated within or without the State. In
the case of Dorr VS.. Boston, 6 Gray, 131, the Court
decided that the equitable interest of a ceStui Qui
trust residing in the State, and entitled to the income
of property, held in trust by a resident of another
State was not taxable by the Statute as then existing.
But it appears that subsequently,, a law passed which
subjected the trust property to taxation.
The decisions of foreign tribunals may be of service
in the construction of our own Statutes, where they
are similar in terms. But they are not entitled to
any consideration where they are controlled by
Statutes, different in their provisions to our own. A
subject of this kingdom cannot be taxed by the laws
of New York or Massachusetts,. The question for
our decision is, whether the laws of this kingdom
authorize the assessment of taxes on personal prop
erty situated in a foreign country, although the
owner resides here.
In the provision of the case cited above, it will be
seen that no reference is made as to the situation of
personal property, whether at home or abroad, ex-
cept in the case of ships and vessels, and they may
be taxed wherever they may be, at home or abroad.
The counsel for Hackfeld & Co., commended that had
the Legislature intended to tax personal property
generally, whether at home or abroad, it would not
have especially designated ships and vessels to be
taxed, whether at home or abroad, but would have
made the general provision which is contained in the
Massachusetts Statute, viz: All property within or
without the State shall be assessed. The Statute,
therefore, in our view, does not authorize a taxation
on personal property situated in a foreign country.
1t is said personal property, by a fiction of law,
has no situs, except with the owner. 1t is always
supposed to be with him, wherever he may reside.
Mr.. Justice Story, Conflict of Laws, S $50, says
that a nation in whose territory any personal prop
erty is actually situated, has an entire dominion
over it. while therein, in point of sovereignty and
jurisdiction, as it has on immovable property situated
therein.
Property should pay taxes to the government
which protects it, and the legal fiction which makes
the situs of personal property wherever the owner is,
with all the unjust consequences which would follow,
can not become fact, as applicable to taxation except
by a legislative enactment.
If a person dies abroad or becomes bankrupt. who
has personal property here, by this legal fiction,
carried out to its legitimate consequences, it would
be necessary to restore it to the administrators or as
signees in bankruptcy, in disregard of the rights of
heirs and creditors here.
In the case of Hoyt vs.. Commissioner of Taxes, %
New York Reports, 224, the Court says that under
the Statute of the State relating to taxation, the per-
sonal property of a resident actually situated in
another State or Country, is not to be included in the
ssessmen of taxes against him.
The law does not fix a precise day on which an as
sessment shall be made. The minister of Finance
has not prescribed any rules or regulations in the
matter and therefore we are of opinion that the list
may be made out when legally required by the as
SCISSOR. in conformity to the 492 Sect. OF the Code.
Upon principle, it is the legitimate right of the gov
eminent which gives protection to property, to have
the advantage resulting from taxation.
There is no more reason why this property should
be taxed here, than the property situated here should
be taxed at the residence of the senior partner IN
Europe. To impose a tax upon property thus situated,
requires a legislative enactment, distinct and clear IN
its terms.
The Court are therefore of opinion that the assess
ment complained of was unauthorized by the Statutes
under which it was made, and should therefore be
reduced in conformity to the terms OF the submission
The assessment of the property of Hackfeid & Co,
is reduced from the sum of S6OO,OOO 10 the sum OF
1876, 49,. q, upon which a tax should be imposed,
unless the parties arrange the matter by mutual ac-
cord. The Chief Clerk viii make the necessary CAL
culatiops of the amount of the tax as affixed by the
law of the 18th of July, 1870, or the foregoing as
sessment and judgment will be entered accordingly.
Costs of Court will be paid equally by the parties.
1 concur in the foregoing. II. A. WDEMANS.
associate Justice.
HARTWELL, J.
Nonresident partners are not taxable for their
interest in firm property abroad, their being no law
o that effect, nor means to enforce it if there were
me. Resident partners are not taxable for their alb
ent co-partners' interest in such property, for no
nan can be made to pay another's taxes on property
ut of his control. The Civil Code expressly limits
he effect and operation of laws to property IS within
he territorial Jurisdiction of this kingdom Sect. 6
things as household furniture, family relics,
Unacceptable notes not payable here, securities
laying no market value here, so long as they are
ut Of the country are not susceptible of valuation
even their existence is uncertain. From these
ousiderations, | concur fully in the Judgment of
he Court.