validity of the taxes cannot be maintained." The situs of a seagoing vessel owned by a corporation, is that of the home port where she is registered.1

$47. Goods in hands of Consignee, or in Transitu.-Where goods are sent from one State to another merely for sale, the rule that personal property follows the person is not so far modified by their actual situs as to make them liable to taxation in the hands of the consignee. The case of The Parker Mills announces the principle laid down, but it arose upon the construction of a statute requiring "all persons and associations doing business in the State of New York, as merchants, bankers or otherwise, either as principals or partners, whether special or otherwise, and not residents of the State, to be assessed and taxed on all sums invested in any manner in said business, the same as if they were residents of the State." The Parker Mills was a foreign corporation, manufacturing nails in the States of Massachusetts and Rhode Island. It had a depot and agent in the city of New York, to whom it transmitted nails for sale. Its only business within the State consisted in making such sales, the proceeds of which were remitted at once to the corporation in Massachusetts; and where sales were upon credit, the securities received were sent to the corporation for collection. Annual sales, $300,000; value of nails in store on day of assessment, $10,000. It is said by the court that the object of this statute was to reach foreign corporations and persons engaged as partners of commercial or other firms, who resided in New Jersey or Connecticut, enjoyed the fruits of a profitable business carried on in New York, and yet, by reason of the rule that personal property is deemed to follow the person, they escaped taxation in New York. In these the investment of the funds has more or less of permanency. It is not the mere transit of property through the State for the purposes of a market. The court likens the case to that of a drover, who transports his herds of cattle to New York for sale, who may have his field or yard for keeping his cattle, and his herdsman to take care of them. It is easy to perceive the difference between the case of the drover put, and that of the merchants doing business in New York, as to their permanency; but the difference between a merchant engaged in a regular business and that of The

1 People, &c. v. Comr. of Taxes, 58 N. Y. 242; s. p. Pacific Mail S. Co. v. Board of Supervisors, 50 Cal. 283.

*The Parker Mills v. The Commissioners of Taxes, 23 N. Y. 242, 245; McCormick v. Fitch, 14 Minn. 252; People v. Coleman, 4 Cal. 46. See also North v. Fayetteville, 1 Winston's (N. C.) Eq. 70; Frank's Appeal, 52 Penn. St. 367; Duer v. Small, 4 Blatch. C. C. 263, as to taxing business in one State when a person resides in auother; also 19 Wall. 502, 503, approving the principle of New York statute quoted.

Parker Mills Company, as to permanency, it is hard to perceive. But I do not understand the court as deciding that a statute taxing the property of a company carrying on such a business as The Parker Mills Company, would be void, because the situs of the property was not sufficiently permanent to make it property within the jurisdiction of the State, and to modify the rule that personal property follows the person; that would be to overrule Hoyt v. The Commissioners of Taxes. They merely decide that the company was not taxable under the statute named. On a similar principle, where a foreign bank sends funds to New York city to be employed in temporary loans, subject at all times to its control, the funds are not taxable in New York.2

§ 48. In Transitu.-Goods in transit to a market are not liable to taxation in the State through which they pass to arrive at a market for sale. The case in New Jersey arose under a statute which makes a person "liable to be taxed in the township or ward in which he resides, for all personal estate in his possession or under his control ast trustee, guardian, executor, administrator or agent." An assessment was made on coal lying on a pier at Elizabethport, under the control of an agent. The coal was the property of a company doing business in Pennsylvania, was mined on their land in Pennsylvania, and sent by the cars of the Central Railroad to Elizabethport, to be there shipped by water to other markets for the purposes of sale. It is the custom of the company, when the coal arrives at Elizabethport, to have it separated according to sizes, and when a cargo of one size is obtained, it is shipped to points in New England, or up the Hudson river, as soon as a vessel can be chartered. None of the coal is sold for consumption at Elizabethport. Dupue, J., delivering the opinion of the court, said: "The duties of the agents were simply to obtain and transmit orders to their principals, and superintend reshipment when delivered. The property was not in the State under such circumstances as to be liable to taxation here. The power of the State to tax subjects of commerce, where their transit for the purpose of commerce has ceased, and they have become incorporated and mixed up with the mass of property in the community, is well settled. But that a tax on the property belonging to a citizen of another State, in its transit to market in other States, which is delayed in this State, not for the purposes of sale, but merely for separation and assortment,

123 N. Y. 224.

2

People v. Comrs. of Taxes, 59 N. Y. 40.

3 State v. Eagle, 34 N. J. L. (5 Vroom), 425; Conley v. Chedic, 7 Nevada, 346; Carrier v. Gordon, 21 Ohio St. 605.

1

for convenience of shipment to its destination, is a tax on commerce among the States, is too plain to require argument. It is not the mode in which the tax is imposed, nor the person against whom it is assessed, that determines whether the taxation is within the power of the State. If a tax can be levied on the quantity on the wharf within the State when the assessment is made, why not on every ton sent across the State throughout the year? A change in the mode and time of assessment is all that would be necessary to accomplish that purpose." In the Nevada case, wood cut in California, owned by a citizen of that State, thrown into Carson river, and passing D. county in Nevada to find a market in O. county in Nevada, was held not taxable in D. county, under a statute requiring all property in the county at a specified period to be taxed there, because the wood was in D. county at the period specified. In the Ohio case cited, the statute makes all tangible property in the State liable to taxation, whether owned by residents or non-residents. The property which was claimed to be exempt from taxation, because in transitu to another State, was property in Ohio, sold to a non-resident and merely awaiting the opening of navigation for its removal. It was held liable to taxation. The court say: "If the property is, at the time the tax attaches, in transitu, either through the State, or from a point in the State to one out of it, it is not within the State in the sense of the statute. Such was not the condition of this property; it had a situs when the tax attached. Simple purchase with intent to remove cannot change it."

§ 49. Double Taxation, or Taxation on Credits.-The equality or justice of the policy of taxing credits, is a question upon which political economists, legislators and courts differ. A commission from the legislature of New York, in their report on this subject, condemn the practice of taxing credits, while a similar commission from Connecticut and one from New Jersey, hold it to be a just and equitable mode of taxation.2 Mr. Walker, in his work, demonstrates the fairness of this system of taxation.3

As to the mortgagee, or, in case of a sale of land on credit without mortgage, the holder of the notes for purchase money, it is settled in several States that the taxation of the credits is not double taxation.'

'Citing Erie Railroad v. State, 31 N. J. L. (2 Vroom), 531, where it was decided that a transit duty of three cents on every passenger, and two cents on every ton of freight, transported by corporations through the State, was void.

ទ Report of Commissioner Wells et al., 1871, to the New York Legislature, pp. 72, 78. 3 Walker, Science of Wealth, ed. 1872, pp. 361-363.

The People v. Rhodes, 15 Ill. 304; State v. Manchester, 1 Dutch. 531; People v. Whartenby, 38 Cal. 461; State v. Williamson, 33 N. J. L. (4 Vroom), 77.

3

The case in California decided it was not double taxation as to the mortgagee, but the question was reserved as to the mortgagor. In a subsequent case it was decided that where the mortgagee paid the tax on the debt, the mortgagor cannot complain of double taxation; it does not affect him. There was an intimation that perhaps the statute, which only allows the indebtedness of a person to be deducted from the amount of solvent demands, in ascertaining the amount of personal property to be taxed, conflicted with that provision of the Constitution requiring property to be assessed at its value, inasmuch as the value of the land in the hands of the mortgagor is his interest in the land, less the debt. This question was most elaborately discussed in a late case in California; the former decisions were reviewed and sustained by a divided court. Crockett and Niles, JJ., thought the taxation of the property mortgaged and of the debt secured was double taxation. The Savings and Loan Society was a banking corporation, with a capital of $500,000, which was invested in U. S. bonds. All the solvent debts due the corporation were for moneys deposited by depositors in the bank, which were loaned out at interest, to be repaid the depositors when returned by the borrowers, with interest accumulating from time to time. These loans were secured by mortgage. This corporation was assessed for solvent debts at $7,968,740, the amount of their loans. It was claimed that the depositors had been likewise assessed and had paid taxes on the deposits. A majority of the court, while holding the opinion just stated, thought it would have been a case of double taxation, if the record had sustained the claim set up that the depositors had been assessed and paid taxes on the deposits. Belcher, J., says: "When money is deposited in a savings bank, to be loaned out for the benefit of the depositor, if it is taxed to the depositor, and the bank has loaned out the money and is taxed upon the note and mortgage, it is double taxation. In this case it does not appear that the taxes had been paid by the depositors of their deposits, and therefore the question of double taxation does not arise. It must appear that the tax has been once paid or tendered by some one." This case is cited in a later case in the same State, as deciding that solvent debts are liable to taxation.1

on any

Where property is taxed in one State, on account of the residence of the decedent, and in another because the evidences of debt in the hands of the ancillary administrator are in the latter State, the fact

1 People v. McCrary, 34 Cal. 459, also decides the same principle.

that it will be thus subject to double taxation is not weighed at all by the courts of the latter State.1 Such taxation may be unjust, but the court cannot disregard the law because it has that effect. But if a certain kind of property is clearly taxable under one section of a statute, the statute will be so construed as not to make the same property taxable again under another section of the statute.3

Double taxation is to be avoided, if possible. It is against the spirit of our laws, and no statute will be construed to impose double taxation unless required by express words or necessary implication; yet, when it contravenes no constitutional provision, the court cannot declare it illegal. The fact that the same value is twice taxed does not render it void.4

In a recent case in California, the taxation of mortgages has been decided a violation of the Constitution of that State, which provides that "taxation shall be equal and uniform throughout the State. All property in this State shall be taxed in proportion to its value, to be ascertained as directed by law." The ground of the decision is that a debt secured by a mortgage is not property. If this be true, then the vast sums loaned in this country and secured by mortgage, the negotiable paper of the country, the bonds of municipalities, of States, and of the United States, all of these securities are not property, they are mere evidences of debt. We venture to affirm that the idea that these evidences of debt are not property in the legal acceptation of that term, never before entered the brain of a lawyer. According to this rule an acre of land in some remote part of the State, not worth five dollars, is property, but a debt of $20,000, secured upon real estate in San Francisco, worth $100,000, yielding an annual income of $1,600, is not property. And the framers of that Constitution intended that the owner of the acre of land should contribute to the support of the State, but not the owner of the mortgage. The case is considered and disapproved in Alabama.

$ 50. Conclusion as to Taxable Situs of Personal Property.-We conclude that the situs of personal property for the purposes of taxation depends in a great measure upon the nature of the property.

1 St. Louis County v. Taylor's Administrator, 47 Mo. 594.

* Tallman v. Butler County, 12 Iowa, 534; approved in 28 Iowa, 370; Toll Bridge Company v. Osborn, 35 Conn. 7.

3 Savings Bank v. Portsmouth, 52 N. H. 17.

Osborne v. New York, &c. R. R. 40 Conn. 491; State v. Chambersburg, 37 N. J. L. 258; St. Louis Mut. Life Ins. Co. v. Bd. of Ass'rs of St. Louis, 56 Mo. 503.

People v. Hibernia Savings & Loan Soc. 13 Albany L. J. 231.

Alabama Gold Life Insurance Co. v. Lott, 3 Central L. J. 643.