191 U. S.

Argument for Appellants.

is that the complainant gets the money which he loans out in cash in New Orleans, by getting the cash which he gives the borrower which has been obtained by drawing complainant's own exchange bills on Europe or New York. This constant introduction in the testimony of its dealing in foreign exchange, is a mere subterfuge to confuse the mind of the court, under the pretense that the complainant's business is entirely in foreign exchange. This was the old subterfuge unsuccessfully attempted in 52 La. Ann. p. 1330.

The following circumstances show that the change was an attempted evasion of taxation: 1st, the refusal of the witness to state the exact time when the change was made, although it was in his power so to state; 2d, the decisions of the Louisiana state courts as an incentive to the change; 3d, his excuse of his client's demands for the change, uncorroborated by a single witness. The change is not such a device as will be recognized and given effect to by the court. As to evasions of taxation, see Cooley on Taxation, 2d ed. 415, 423; Welby on Assessments, p. 317, § 174; Greenhold on Public Policy, 48, 152; 12 Eng. & Am. Ency. 2d ed.; Mitchell v. Commissioners, 9 Kansas, 235, affirmed 91 U. S. 208; Shotwell v. Moore, 45 Ohio St. 632, affirmed 129 U. S. 590.

These decisions show that the courts look upon such transactions as indefensible, and consider them improper evasions of the duty of the citizen to pay his share of the taxes necessary to support the government.

This doctrine has been uniformly sustained by the Supreme Courts of the States, whenever the issue has been presented. Jones v. Seward, 4 N. W. Rep. 946; 10 Nebraska, 122; Dixon County v. Halstead, 23 Nebraska, 697; 37 N. W. Rep. 621; Drexler v. Tyrrell, 15 Nevada, 115; Holly Springs Sav. & Ins. Co. v. Supervisors of Marshall County, 52 Mississippi, 281; 24 Am. Rep. 668; Sheldon et als. v. Pruessner, 22 Lawyers' Annot. Rep. 709 (Kansas); Ogden v. Walker, 59 Indiana, 460; Poppleton v. Yamhill Co., 8 Oregon, 340; Waller v. Jaeger et al., 39 Iowa, 228; Bellinger v. White, 5 Nebraska, 401.

Argument for Appellee.

Mr. Harry H. Hall for appellee:

191 U.S.

It is not within the power of a State to tax property unless the same is actually or by contemplation of law within its jurisdiction. St. Louis v. Ferry Co., 11 Wall. 429; State Tax on Foreign Held Bonds, 15 Wall. 300; McCulloch v. Maryland, 4 Wheat. 428; United States v. Erie R. R. Co., 106 U. S. 327; Hagar v. Reclamation District, 111 U. S. 701; Erie R. R. Co. v. Pennsylvania, 153 U. S. 628; Railroad Co. v. Jackson, 7 Wall. 262; Delaware R. R. Tax, 18 Wall. 206; Dewey v. Des Moines, 173 U. S. 193; Louisville & Jeffersonville Ferry Co. v. Kentucky, 188 U. S. 385; Railey v. Assessors, 44 La. Ann. 765.

While tangible personal property, by a fiction of law, has been said to follow the domicile of its owner, it may be taxed at its actual "situs;" but it has never been held that an incorporeal thing, a mere abstraction, such as the naked obligation to pay a debt, could be so taxed. For an incorporeal thing, being an abstraction, can have no "situs." State Tax on Foreign Held Bonds, 15 Wall. 300.

As to mortgages and bonds and negotiable notes, see Kirtland v. Hotchkiss, 100 U. S. 491; Dundee v. School District, 10 Sawyer, 52.

A mortgage, so far as taxation is concerned, is a mere security. Hence, the question of the situs of notes and bonds is generally held not to be affected by the fact that the paper was or was not secured by mortgage, or, if so secured, by the location of the mortgaged premises. 15 Wall. 300; 51 N. J. Law, 140; 100 U. S. 491; 42 Connecticut, 426; 19 Am. Rep. 546; 12 Iowa, 539; 26 N. J. Law, 564; 68 Indiana, 247; 3 Colorado, 349.

Some courts, however, proceeding on the theory that a mortgage is an interest in land, have held it taxable in the State where the land lies, although held by a non-resident. 11 Oregon, 67; 50 Am. Rep. 462; 91 Michigan, 78; 1 Clarke Ch. N. Y. 42; 52 Pa. St. 140; 123 Pa. St. 594; 72 Pa. St. 72; 66 Pa. St. 73.

The general rule is, that debts follow the person of the creditor, and are to be taxed at his domicile. 4 Woods (U. S.),

206; 38 California, 461; 42 Connecticut, 426; 19 Am. Rep. 546; 43 Georgia, 336; 50 Georgia, 387; 108 Illinois, 113; 14 Indiana, 354; 59 Maryland, 472; 26 Am. Rep. 87; 68 Maryland, 247; 54 Iowa, 57; 65 Iowa, 110; 4 Bush (Ky.), 135; 8 B. Monroe (Ky.), 1; 41 La. Ann. 645; 41 La. Ann. 1015; 44 La. Ann. 760; 50 Maryland, 354; 25 Ohio St. 10; 3 Mo. C. S. C. 374; 27 Gratt. (Va.) 354; 25 California, 601; 33 Georgia, 113; 2 Oregon, 327; 13 S. W. Rep. 30; 75 Texas, 476.

In the taxation of personal property, two inconsistent doctrines often come into conflict; the one mobilia sequuntur personam, commanding that the property shall be taxed at the owner's domicile, on the theory that the personalty has no other situs; the other, that it shall be taxed like real property, where it is situated. Ordinarily, the first rule will prevail, and, as a general rule, personal property is taxable at the domicile of its owner. Cooley on Taxation, 2d ed. pp. 56-372; Burroughs on Taxation, par. 40; 14 Illinois, 163; 56 Am. Dec. 493; 12 Maryland, 464; 47 Connecticut, 477; 138 N. Y. 543; 10 Massachusetts, 514; 17 Massuchusetts, 461; 4 E. D. Smith (N. Y.), 675; 34 N. J. Law, 45; 23 N. J. Law, 532; 24 N. J. Law, 56; 30 N. J. Law, 13; 11 N. Y. 565; 15 N. Y. 316; 122 Pa St. 386; 14 Allen (Mass.), 366; 84 Iowa, 407; 17 Vermont, 609.

In regard to assets evidenced by negotiable bills, notes and bonds, there are two lines of decisions.

The view which is probably the more logical is, that the paper is mere evidence of indebtedness, and that the debt itself can have no actual situs wherever the paper may be; hence, the situs, in the eye of the law is, as in the case of ordinary debts, at the residence of the creditor. 131 Massachusetts, 24; 48 Ohio St. 648; 33 Iowa, 376; 16 Fed. Rep. 11; Cooley on Taxation, 2d ed. p. 15; 15 Wall. 300; 30 La. Ann. 876; 31 Am. Rep. 232; 106 Illinois, 25; 24 Pac. Rep. 182; 11 So. Rep. 393.

Money, while a mere medium of exchange, is, so far as taxation questions are concerned, a form of tangible personal property. It may be taxed at the owner's domicile, but is generally

Argument for Appellee.

191 U. S.

taxed where it is actually situated. 1 Nevada, 397; 48 N. Y. 310; 2 McCrary (U. S.), 337; 44 La. Ann. 91; 66 How. Pr. (N. Y.) 190; 4 Blatchford, 263; Blackstone v. Miller, 188 U.S. 187. For Louisiana decisions, see Meyer v. Pleasant, Sheriff, 41 La. Ann. 645; Liverpool &c. v. Assessors, 44 La. Ann. 760; Clason & Co. v. City, 46 La. Ann. 1; Parker v. Strauss, 49 La. Ann. 1173; State ex rel. v. Board of Assessors, 47 La. Ann. 1544; Comptoir National v. Board of Assessors, 52 La. Ann. 1319.

In paying the tax upon this average balance in New Orleans, the Comptoir recognizes the correctness of the decisions that money sent by a foreign creditor to its local agent in another State, to be there employed in business and retained there for investment, under the protection of its laws, is liable to be taxed. Under such conditions the rule, mobilia sequuntur personam, does not apply. New Orleans v. Stempel, 175 U. S. 309, quoting from cases cited supra and Catlin v. Hall, 21 Vermont, 152; Goldcart v. People, 106 Illinois, 25; In re Jefferson, 35 Minnesota, 215; Blackstone v. Miller, 188 U. S. 189, citing Morley v. Railway Co., 146 U. S. 162; Kelly v. Rhoads, 188 U. S. 1; Diamond Match Co. v. Ontonagon, 188 U. S. 84; Walker v. Jack, 88 Fed. Rep. 580, and cases cited.

A foreign corporation stands upon the same footing as an individual in respect to its credits arising from obligations incurred in another jurisdiction, nor does it by such loans bring its entire capital into that jurisdiction. Liverpool &c. v. Assessors, 44 La. Ann. 760; Gloucester Ferry Co. v. Pennsylvania, · 114 U. S. 196.

While the State has not the power to localize an abstract credit, it may tax tangible personal property at the place of its location away from the domicile of its creditors.

Tangible personal property is assessed sometimes at the domicile of the owner; sometimes at the place where it is situated. 25 California, 30; 39 California, 112; 21 Indiana, 335; 27 Indiana, 288; 92 Indiana, 222; 26 Illinois, 300; 79 Am. Dec. 377; 53 Illinois, 45; 80 Kentucky, 489; 3 Maryland, 259; 16 Gray (Mass.), 292; 60 Mississippi, 142; 15 N. J. Law, 320; 23 N. J.

Law, 517; 17 Nevada, 383; 7 R. I. 317; 2 Spears (S. C.), 719; 14 B. Monroe (Ky.), 521; 91 Alabama, 398; 114 U. S. 622.

The State may, however, and often does, make it taxable at its actual situs. Dillon on Municipal Corporations, 4th ed. par. 786; Welty, Assessments, par. 34; 26 Illinois, 300; 79 Am. Dec. 377; 23 N. J. Law, 517; 23 N. Y. 224; 51 Barb. (N. Y.) 352; Tappan v. Bank, 19 Wall. 490; United States v. Bank, Robinson La. Rep. 262.

8

The cases cited show that the Legislature of Louisiana has never attempted to localize mere debts due to foreign creditors, for the purpose of taxation, and such attempt, if made, would be in violation of the constitution of the State.

MR. JUSTICE DAY, after making the foregoing statement, delivered the opinion of the court.

The constitution of the State of Louisiana of 1898, article 225, declares that all property shall be assessed in proportion to its value. Section 1 of the act of 1898, passed by the general assembly of the State, defines "property" to include "all personal property, all rights, credits, bonds and secu

rities of all kinds, promissory notes, open accounts and other obligations, all cash. all money loaned at interest, and all movable and immovable, corporeal and incorporeal articles or things of value, owned and held and controlled within the State of Louisiana by any person in any capacity whatsoever." Section 7 of the act provides that it shall be the duty of the assessor to place upon the tax roll all property subject to taxation. "This shall apply with equal force to any person or persons representing in this State business interests that may claim a domicile elsewhere, the intent and purpose being that no non-resident, either by himself or through any agent shall transact business here without paying to the State a corresponding tax with that exacted of its own citizens; and all bills receivable, obligations or credits arising