The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1856-1888, 1879-03-15

perty held in trust, should be assessed to The trustee
where lie resides. CooleJ on Taxation, p go,
Chapter XII In this country, the statute does
provide that all personal properly SHALL be taxed
The last clause Of the 1891 section of the Jaw
quoted aboye, does not enlarge nor limit the prin-
eiple Of taxation set forth in the first clause OF the
section, but merely illustrates what may be cOnsi-
dered personal property and still leaves the principle
the same. that all personal property within this
Kingdom is 10 be taxed. The statute in this respect
is the same as il is in many Of the States Of the
United States and notably in the States Of New York
and Vermont, 10 the decisions Of which States we
refer.
The case Of the people vs.. Gardner, 81 Barb. 35S.
in which the people are made the nominal plaintiffs
by the relation Of Cyrus Jefferson, against the town
Of Warsaw, was a case to determine whether capital
invested in Wisconsin and Illinois, for which secu-
rites were taken and held in those States by the
REALTORS agents, were liable to taxation 10 New York;
and the proposition was that If TIE property could
legally be held to be in the State y. New York at
the time Of the assessment, in consequence Of the
residence Of Jefferson within the State Of New York,
then the assessment was legal and proper. But if,
on the contrary, the property ought to be considered
to be IN Wisconsin or Illinois, then the assessment
IN New York IVES Illegal; and the argument set
forth in the opinion of the Court is so applicable to
this c's@. that We quote from it largely.
ell g slear,'' says the Court. " that the property
On account Of which the assessment is made, had
no actual location or situs within this State, New
York;. For the moneys loaned and the securities
taken and held for the payment Of such loans were
actually 10 the States Of " isconsin and Illinois. So
q - Aufg nSIc NuluBS haFiuB u SuDStdutAdl eAlSt
enee, they were in those STATES and not elsewhere"
Applying that TO the case before US. the property in
question has no situs in Germany where the persons
reside for whose benefit the securities are held, but
so far as they have n substantial existence anywhere,
they are in this country. We continue the Quota
ton. 1.-The validity Of the agreements, under
which the loans were made, the protection Of the
securities taken for their payment and the remedies
provided for enforcing the securities depend alike
upon their laws; and in no respect do the persons
for whose benefit the securities are holden derive
any benefit from the laws Of the country in which
be resides"
Again, the Court says, (" by q legal fiction, the
personal estate Of the owner has for some purpose
been deemed TO follow its owner, but in the adjust
ment of systems of taxation, this fiction has been
very generally rejected on the ground that it was
productive Of unjust consequences. And other cases
exist, where, for a like reason its application has
been denied. As to visible and tangible personal
property capable Of having a situs away from the
owner or its domicile, this fiction has not been al
lowed TO PREVAIL
Says Judge Comstock, in People We. Commissioner
Of Taxes, % New York 234, q the property must he
within this State in order to be subject to taxation,
for so is the statute; II may be true Of obligations
for the payment Of money due 10 a creditor resident
here, from a debtor whose domicile is another State,
that such property may be regarded as being In the
State where the creditor resides. But, VIXEN the
securities are separated from the person and domiciie
o! the owner, and are actually in the hands of an
agent, in another State for collection, they must be
regarded as being in the State where the securities
are"
The case of Catlin VS.. Hull. q Vermont. Ia,
presents exactly a similar case to this under cOasi-
deration. The statutory provisions are similar -
our own. The money belonged to a person resident
in the city Of New York, and was loaned on a Pio-
missOry note, by an agent residing in the State OF
Vermont, and the securities were in the hands Of
that agent. 1t will be seen that the case Is identical
with this under contemplation. The Supreme Court
Of the State Of Vermont held that the property was
taxable in that State, and rejected :he application Of
the legal fiction, that the situs Of the property fol-
Loved the owner This so has eincp hppn frpnupnt-
ly cited with appreciation and its reasoning followed.
In the case of the People VS.. The Trustees of the
village Of Ogdensberg. decided in 1872, (48 n. \.
397), il is held that " debts due upon these contracts
(for the sale of lands) are personal estate, the same
as If they were due upon notes and bonds; and such
personal estate may be said to exist where the obi
cations for payment are held. Notes, bonds and
other contracts for the payment of money have al
ways been regarded and treated in law as personal
property. They represent the debts secured by
them. They are the subject of larceny and a trans
fer Of them transfers the debt. If this kind of pro-
perty does not exist where the debtor may be. and
follow his person, where does it exist? And while,
for some purposes, by legal fiction it follows the per-
son of the creditor and exists where he may be, yet
it has been settled that for the purpose Of taxation,
this legal fiction does NOT, to the full extent, apply,
and such property belonging to q nonresident cred
itor. may be taxed in the place where the obligations
are held by his agent" In Thorndike VS.. the City
Of Boston, Metcalf 242, it was held, that tie plain
tiff, who had changed his domicile to Edinburg, was
not liable TO taxation in the city Of Boston on any
Of his personal property.
So likewise in Sears vs.. City Of Boston, l Metcalf,
253, it was held, that the plaintiff was rightly taxa
bic in Boston, though residing in Paris at the time,
because he was only temporarily absent and had
not changed his domicile; it being plainly intimated
that if he had changed his domicile, be would not
have been liable to the tax.
But the statute Of Massachusetts, reads "All pro-
perty real and personal Of the inhabitants of the
State, shall be subject to taxation; !" whereas our
statute says, that ''All property of whatever kind,
shall be subject to an annual tax without limita-
ton 20 the property OF inhabitants, but meaning TO
tax ell property within the jurisdiction whether be-
longing TO Inhabitants or not.
So that, by reason and authority, it would appear,
that the State has authority TO tax all property
within their jurisdiction; that it has exercised that
authority; II is the duty Of the Court to give weight
TO the enactments Of the Legislature; and the notes
and security, the subject Of this controversy, and
held for the benefit Of persons residing abroad, are
property having a situs within this country, and are
properly taxed.
Nor will it make any difference, that the owners
Of this property may be liable to taxation in an
other country on account of it, for this would not
justify q Court in disregardiag the positive direc-
tons Of our own Legislature. billiard on Taxation,
Chsptet l. S. s. Bemis vs.. City of Boston, II Allen
sos. Catin VS.. Hull, p Vt. 152 above cited.
The arguments which have been set forth above,
and the authorities which have been adduced to sup
port them seem TO dispose of the whole matter before
us. But inasmuch as a special point IS made by the
protest to the effect, that " the debts, upon which
these plaintiffs are assessed, are secured by mort
cages on real and personal property in this King
dom, on which said mortgaged property taxes are
assessable. and payable by law, without allowance
or deduction, by reason Of any mortgage thereon.
aud therefore such assessments and collection are
illegal;'' We will somewhat farther consider this
particular phase of the case.
And first, it is argued that credits are not pro-
periy, and We are referred to People VS.. Hibernia
Bank, 81 Cal, 243, and TO certain articles recently
appearing in periodical literature over an illustrious
name.
Now, solvent credits have always been hitherto
reckone1 as property. billiard on Taxation, Chap.
V, Section 43. And our statute itself enacts, that
" notes Of hand and unsecured debts - are property;
and having designated these as included in the term
" personal property states that 4" every species of
property, not included in real estate is the subject of
taxation" Now all the sums, the subject Of this
controversy, are represented by notes Of hand, and
therefore by the statute are property, and the subject
Of taxation. But it is farther argued, that these
notes of hand should not be taxed, because that, the