St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-03-12

port ct al. VS.. Inc MISSISSIPPI ~ MIS-
souri, Railroad Company, reported in II
Iowa. at page 49, says:
Mortgages before foreclosure are chooses in |
action, and us such attach TO the person of |
the holder, and are taxable at the place of his |
domicle They are not taxable in this state |
when the owners are non residents.
The supreme court of California. in
the case of The People vs.. Eastman, re-
ported in p California, at page COS,
says:
The mortgage has no existence independ-
ent of the thing secured by it; a payment of
the debt discharges the mortgage The thing
secured is intangible. and has no situs dis |
tinct and apart from The residence of the
holder 1t pertains to and follows his per
son.
And to clinch the matter and remove
what weight there may attach to con-
trary opinions by other courts and
writers, the supreme court of the United
States has taken the same position in
the case of Killand VS.. HOtchkiss, in
100 United States. page 49l, and the
other decisions which the GLOBE has
already referred to in its comments
on Mr.. DONNELLY'S original measure.
1t perhaps is a mild charge against Il
bill to accuse it of being unconstitu-
tional. But the practical difficulties
with this measure are just as great. WHY
should man who is fortunate enough
to own unincumbered real estate be.
taxed for its full value, While the man
who OWNS property subject to mort
gage escapes with a tax on the value of
his equity? If the answer to this is
that the mortgage pays the tax on the
balance and the total amount is thus
secured, let lis go step further and
suppose two men, both of whom own
real estate of equal value, and that they
each borrow $1,000. One of them has
Door credit because of his lack of char
acter and ability, ard he has to
secure his debt by a mortgage.
| The standing of the other is such that
! he can borrow the money on his unSe
! cured pTomissory note. Should the
TAwNEY bill so into effect. the sum
total of taxes Oh the property and debt
| of the first man would be the value of
| his real property. In the case of the
| second man it would be the value of his
real property and the amount of his
loan, because this would be taxable un-
der the law in the hands of the owner
of the promissory note as personal prop
erty. Here the result would be to create
tax on $4,000 as an additional burden
| because one man had more credit than
another.
Again, the assessor is, under the
| TAwNEY bill, to divide the total value
of the real property taxed between the
mOrtgagor and MORTGAGE in proportion
TO their respective intere IS. The
GLOBE wishes him JOY of his task, but
would like to know how he is going to
do it. Suppose piece OF property is
mortgaged for all it is Worth-is the fee
owner to pay nothing? Well and good.
Suppose it is mortgaged for more than
it is worth, how then is it to be divided?
Is the mortgageor to pay nothing and
the MORTGAGE to pay up to the full
value of the property? Then, il a man
holds a tWo-thouSand-dollar note Sc
cured by mortgage Oh piece Of prop
erty worth 81 900. but the payment of
which is sure because the III aker or in
dorser is good for the amount he is to
pay taxes on only $1,000 of the debt and
be exempted as to the other thousand.
Mr.. COLE, of Otter Tail county. has Il
bill before the house providing for the
listing of promisSory notes for the pur-
pose of taxation. Under the TAWNEY
bill all its provisions could easily
be defeated, for man with mill
ion dollars worth of gilt-edged paper
could secure it by a mortgage on prop
erty worth a hundred dollars, and fear
essly display it to the assessor, anC
defy him to tax 1t. OF course the other
view is conceivable; and that, III cast
the mortgaged property is worth less
than the debt secured by it, the debt
| shall nevertheless be taxed up to its
face value. But this would be legally
impossible, because it would nowhere
appear that its face value was its rea
value: and in the second place. as tn
tax on mortgages is by this bill made
: tax on realty, the actual value of the
realty would be the ultimate limit which
any court would sustain as a basis o.
| taxation.
With one more point the GLOBE end
this deSultOry discussion of this curious
= measure. In order to put a premium
= on low rates of interest the bill proposes
! TO exempt from taxation all mortgage;
: not carrying rate about 6 per cent
but i'll case of such exemption of tn
mortgage the fee owner is to be taXet
to the full value of the realty. Grant
, ing for the sake of argument that III
/ law would be operative, we should hav
@ as resulting paradox this situation
n 1t would be more profitable for boz
: rover il Ramsey county to pay : pc
, cent for money than it would to pay
+ per cent, and just as profitable to pa
| per cent as to pay 6. If he borrow
|. money at per cent under this bill, tn
S mortgage pays the , per cent tax on
/ which is imposed in this county, so tina
< his total rate Of payment remains pc
V cent. If he bOrrowS at 6 per cent, til
II mortgage pays no tax, but the borrowe
Y pays per cent on the proportion of tn
" realty which is represented by TIL
;, amount of the mortgage. In othe
e words, by getting his money at 6 pc
+ cent he has to pay for it, TO the NOR
gagee and , to the county.
0 If all this does conquer the heroes c
/ tue low lands, or, to put it more intellis
o IDLY. if this does not beat the Dutch
4. the GLOBE would like to know wha
: does.
n IT CURES THEM.
e The Chicago Tribune. in all Issue thi
d week. devotes much space to deScril
" ton of the operations and processes