Case Name: H. Y. Riddle, Ex Parte
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1874-03-07
Citations: 8 Heisk. 817
Docket Number: 
Parties: H. Y. Riddle, Ex Parte.
Judges: 
Reporter: Tennessee Reports
Volume: 55
Pages: 817–823

Head Matter:
H. Y. Riddle, Ex Parte.
Under section 33 of the Assessment Law of 1873, chapter 118, Clerks of Courts having funds in their custody, are required to return the same for taxation, and to pay the taxes thereon.
EROM WILSON.
Appeal from the order of the Chancery Court at Lebanon, on an agreed case, October Term, 1873. Chas. G. Smith, Ch.
Jordan Stokes and J. W. Head & Sons for appellants.
The single question presented in this case is, whether the Clerks and Masters are required to give in for taxes, funds in their hands accruing in suits pending in the Chancery Courts. Ve do not controvert that it is their duty to give in for taxes, some funds; but by a proper construction of the act they are not required to list all funds they may hold by virtue of their office.
The distinction, we think, is this. The Clerk and Master should give in all funds he may hold as trustee, receiver, etc., and to which the parties' in interest not be entitled, or to which their rights may not be settled. But if he holds the funds merely as Clerk, to collect and distribute, the rights of the parties having been settled, then, the parties and not the Clerk should list the same. "We concede that the-, funds are to be taxed. The only question is, in whose name are they to be taxed?
By the Revenue Act of March 22d, 1873, section 4, the basis of all assessments is laid down. The first paragraph provides, that the property shall be assessed to the person, or persons owning, or claiming to own the same, on the 10th day of January, of the year for which the assessment is made, if known, if not, then to unknown owners.
Section 7 fixes the heads under which personal property shall be assessed. Paragraph 4 embraces “ notes, due bills, negotiable paper, and accounts on solvent persons, or parties believed to be solvent, and all other assets, including cash on hand, or on deposit in this State or elsewhere.”
Section 31 requires the assessors to furnish every person, company, firm or corporation the proper blanks; and each tax payer is required to make oath that the schedule contains a true and complete list of every item and description of property owned or controlled by him in his county, required to be listed under the laws of the State.
These provisions of the act, certainly, contemplate, and are broad enough to embrace every species of property a party may own. And they, necessarily, embrace all funds in the hands of the Clerk and Master to which they may be entitled. Henee, such funds are to be assessed in the names of the persons owning the same, unless some other' provision of the statute changes this requirement. This, it is eon-tended, is done by section 33, which enacts, “that persons acting as trustees, administrators, guardians, agents or attorneys, or in any fiduciary capacity whatever, shall make a return of the property, moneys, credits and effects held by them in either of said capacities, separate from their individual returns, and the same shall be listed separately for taxation, as provided in the preceding section.” ' '
Taking the several sections together, it seems it was the intention of the Legislature' to require persons holding property or moneys that could not be reached in the hands of the real owner, to list the same in their names. Executors, administrators, guardians, etc., very properly, are required to list the property they hold. So the Clerk and Master is required to list property held by him in a fiduciary capacity; that is, as trustee, administrator, receiver, etc., he having a special property in the same. But if he simply holds the funds as custodian under orders of the Court to collect and pay over the same, he does not, in the sense of ‘section 33, hold it in a fiduciary capacity, and should not list the same. Unless this ’ be the proper construction double taxes are liable to be collected. The owners of ' the moneys in the hands of H. Y. Riddle, Clerk and Master, were required" by' the act and the oath to list said funds on ' the 10th ■ of January. There is nothing to show that they have not done so. They have had no notice' of this proceeding. Now, if they have discharged their duty, and we are to presume they have, said funds have been assessed. If this be so, they should not be again assessed in the name of the Clerk and Master.
The construction of the act for which we contend removes all difficulty. If the Clerk and Master is merely the custodian of the property or moneys, the rights of the parties being fixed, .the same should be assessed by and in their names. If the Clerk and Master has a special property, in. property, or funds as trustee, etc., by virtue of an appointment of the Court, the real owners not beings sui juris, or their rights not being settled, the assessment should be made by and in the .name of the Clerk and Master.
Adopting this construction secures the assessment of all funds in the hands of Clerks and Masters, and avoids much' of the confusion and injustice that would result from the construction contended for.
Atty.-Gen’l IIeiskell for the State.
The brief in this case merely insists that the tax ought to be given in and paid by the owner of the fund. Certainly if the owner pays it that is an end of the question. But by the present tax law, the intention of the Legislature is clearly manifest to make every man whether owner or agent return the fund in his hands, and to make the fund liable for the tax. If the owner of any fund in the hands of a Clerk and Master, makes it appear that he has paid the tax On the fund in Court or in the hands of the Clerk, then of course the Clerk and Master will not pay it again. But until that is made to appear, the Clerk and Master is bound to return the fund and pay the tax. In the construction of these statutes the full disclosure and prompt payment of the tax to the State ought to be the leading object in view, such being the evident intent of the Legislature. There, can be no danger that the tax payer will fail to protect himself. For that we may trust the instinct of self-interest, and the watchfulness of the individual.

Opinion:
Nicholson, C. J.,
delivered the opinion of the Court.
The Clerk and Master of the Chancery' Court at Lebanon, having in his hands as Clerk, the funds of various parties, subject to distribution under the orders of the Court, submitted to the Chancellor, by petition, the question, whether it was his duty, under section 33, of the Assessment Act of March 25th, 1873, to report said funds for assessment. The Chancellor held that the funds should be assessed for taxation, and that the same should be reported to the assessor for that purpose. From this holding the owners of the funds have appealed.
The section of the act of 1873, under which the question arises, is as follows:
Sec. 33. "That persons acting as executors, administrators, guardians, agents, or attorneys, or in any fiduciary capacity whatever, shall make a return of the property, money, credits and effects, held by them in either of said capacities, separate from their individ .ual , returns, and the same shall be listed separately for taxation," etc.. . .,
It, is insisted. for the appellants, that the true construction! of this section is,, that if the Clerk is merely the custodian of the property or moneys, the right of the parties being , fixed, the same should be assessed; in their names. But if the Clerk has ,a special property, in property or funds as trustee, etc., by virtue of an appointment of the Court, the real owners not being sui juris, or their rights not being settled, the amount should be made by and in the name of the Clerk.
"We are unable to discover in the language of the section, that the Legislature intended to make the distinction contended for. The leading object was to-provide the means by which all properties, moneys, etc., should be reached for taxation. To ascertain and assess all such property, money, etc., was the first thing to be secured. To affect this object, section 33 was intended to reach all such property, moneys, etc., not in actual possession or under the actual control of the owners thereof. Hence, it is made the duty of all persons acting as executors, administrators, guardians, agents, or in any fiduciary capacity whatever, to make return, etc. The language is as broad and comprehensive as words could make it. It was not intended that this duty should be confined to executors, .administrators,'guardians, and others acting in any (fiduciary capacity whatever, but it is expressly imposed, also, on "agents and attorneys." That this language was used with the intention of embracing other agents than those having a special property in funds, as trustee, etc., by virtue of an appointment of the Court, seems clear from the care with which it is provided, that " agents or attorneys " shall make returns, and then that all persons " in any fiduciary capacity whatever," shall also make returns. Hence, if it be true that the Clerk does not hold the fund in question in any fiduciary capacity whatever, under the appointment of the Court, which is by no means conceded, yet it is clear that he holds them as agent of the owners thereof, and as such is bound to return them for assessment.
We think argument is ab ineonvenienti, against this construction, is answered by the fact, that such funds are required to be returned separate from the Clerk's individual returns; and by section 32, the assessments are to be returned to the County Court, where the owners of the funds can readily see whether or not their funds 'have been assessed twice, and have the error corrected.
We are of opinion that the Chancellor's holding was correct, and we affirm it with costs.
Note. — The costs were ordered to be retained out of tbe funds in tbe bands of tbe Clerk.