82 Miss. 263 | Miss. | 1903
delivered the opinion of the court.
One of these cases is here from the circuit court of Coahoma county; the other from the chancery court of Copiah county. The one from Copiah county presents the question whether the interest of a mortgagee is such an interest in the land itself, covered by the mortgage, as renders it liable to taxation. The one from Ooahoma county presents the question whether the notes and mortgages, as “solvent credits,” have a “business situs” in that county. There is a distinct line of decisions holding with our case (Jahier v. Rascoe, 62 Miss.,
The statement of facts in the Coahoma county case does not contain any stipulation that Mr. Glover was the agent of the appellee. But the facts as to his agency are practically the same with those as to the agency of Bowell in the Smith Case, 68 Miss., 19, 8 South., 294, and it was there held, rightly or wrongly, that Powell was not the agent of the lender. The lender (the appellee) has its place of residence in England. It has a local agency in Memphis, Tenn.; but it is expressly agreed that it has no office or place of business in this state. The agreement does not set out that Mr. Glover secured all the loans. On the contrary, it was expressly agreed that loans were secured by other attorneys than Mr. Glover, and sometimes by the borrowers direct. It is further agreed that the notes and
We think on this statement of facts we are concluded by the case of State v. Smith, 68 Miss., 19, 8 South., 294, as to the Coahoma county case. This court said in that case: “There can be no doubt that, where an agancy is created in this state for the loaning of money, and the business of loaning it is carried on here — this state being the locality in which the. transaction is begun and completed — and the debt acquires a situs here, from the course of dealing between lender and borrower, through the agency established here, it is taxable; but where the nonresident lender has no place of business or location or agent in this state, and accomplishes the loan beyond the limits of the state, the fact that negotiations for the loan were made by persons in this state, and it was secured by mortgage on property in this state, does not subject it to taxation here.
The section of the Code of 1892, under which this tax is sought to be imposed, is the same with section 497 of the Code of 1880. State v. Smith, supra, is conclusive of this Coahoma county case. It has been too long recognized as the law, and business investments have been too long made upon the faith of it, to permit it to be questioned. The remedy is with the legislature, not with the courts. Counsel for appellant earnestly insist that the clause in the trust deeds, to wit: “The contract embodied in this conveyance and the notes secured hereby shall be construed according to the laws of Mississippi, where the same is made,” localizes and domesticates the debts therein, and subjects the same to taxation in this state. The facts show where a contract is made, and the court held in the Smith Case that, although the negotiations were concluded in this state, and the contract made, as shown by the facts in that case — substantially identical with the facts here —yet it was not a contract “made” here, and that Powell was the agent of the borrower. As to the last propositions, dealt with in a very summary way in the Smith Case, we say nothing; but as to its interpretation of section 497, Code 1880, it seems to us sound. Whether one is an agent depends, not on paper recitals, but on the facts.
We are unable to see any difference between that case and this as to how the business of lending was conducted, and feel bound by that decision. The object of the clause in the con
As to the Copiah county case, it has been too long settled in this state to admit of further debate that a mortgagee has no interest or estate in the land mortgaged. Buckley v. Daley, 45 Miss., 338; Freeman v. Cunningham, 57 Miss., 67; Beckett v. Dean, 57 Miss., 232. In Buckley v. Daley, supra, the court says: “The estate in the land is the same thing as the money due upon it. Under our decisions the extent of the mortgagee’s right is to sell the property for the purpose of realizing his debt — a mere right to resort to the security for the payment of the debt. He has no title which is- vendible under execution. ■ It is held that, after breach of condition, he may maintain ejectment; but this he can do only as a means to the end of enforcing his security.” It is expressly said that “his estate is neither legal nor equitable,” and that he has no “interest in the property, or right to it, except as an incident to the chose in action secured by it.” These decisions are conclusive in favor of appellee in the case from Copiah county; for the effort in that case is solely to tax the mortgages as if they were land, or, to phrase it a little differently, to tax the mortgagee’s interest as real estate. This has not yet been done in this state; on the contrary, the very language of section 3757 in the Code of 1892, “shall be taxable for the same in the county in which such persons may reside, or have a place of business, or be temporarily located at the time of the assessment,” indicates clearly that the legislature, in this section, dealt with loans of this sort as following, according to the general rule of law, the person of the creditor, and as being taxable at his domicile. At the
There are other questions in these cases, upon which we desire to remark. First, it is beyond controversy that the interest of a mortgagee in the lands mortgaged, whether it be, as here, a mere right to sell land to pay the debt — a chose in action only — or whether it be, as held by the United States supreme court and many state courts, an actual estate in'the lands itself, is in either case a sufficient interest therein, in constitutional law, to empower the legislature to tax it, by express enactment, as an estate in land. This is conclusively settled by the United States supreme court in the Multnomah County Case, 169 U. S., 429, 18 Sup. Ct., 392, 42 L. Ed., 803, and in New Orleans v. Stemple, 175 U. S., 321, 20 Sup. Ct., 110, 44 L. Ed., 174. See, also, Bristol v. Washington County, 177 U. S., 133, 20 Sup. Ct., 585, 44 L. Ed., 701, and the State Tax on Foreign-Held Bonds, 15 Wall., 300, 21 L. Ed., 179; and Walker v. Jack, 31 C. C. A., 462, 88 Fed., 576, opinion by Judge Taft; and Howell v. Gordon (Mich.), 86 N. W., 1042; and Allen, Treasurer, v. The Nat. Bank of Camden, 92 Md., 509, 48 Atl., 78, 52 L. R. A., 760, 84 Am. St. Rep., 517. In
It is strongly urged that the Smith Case, 68 Miss., 79, 8 South., 294, is “antiquated and obsolete, and in plain conflict with the modern decisions” on the subject of taxation, especially the cases cited from the United States supreme court, relied on. We think the trouble is not so much with that decision — at least as to its interpretation of the statute — as with the statute itself. Originating in 1857, at a time in this state when agriculture was everything, and commercial interests of slight comparative importance, the failure of the legislature to follow the. advanced statutes of other states on the subject of choses inaction, including mortgage debts, is to be attributed to the conditions, until quite recently obtaining in Mississippi, as to-agriculture and commerce.
We have read critically all the cases cited from other state-supreme courts and the United States supreme court, and the doctrine of these, the latest cases, on the power and propriety of the legislature’s compelling the owners of the mortgage debts and other choses in action to pay taxes -on the same in the state where they must be enforced or collected, and, to that end, of giving them all a “business situs” there, or, as to mortgages, of legislatively declaring the interest of the mortgagee to be an estate in the land for the purpose of taxation, and fixing its
We also call special attention to the following well-considered statements of the law, one from the supreme court of Pennsylvania and the other from the court of appeals of New York. Says the former in Maltby v. Reading, Etc., 52 Pa., 140: “The principle of taxation as the correlative of protection, perfectly just in itself, is as applicable to a non-resident as to the resident owner, because civil government is essential to give value to any form of property without regard to ownership, and taxation is indispensable to civil government. ... It is apparent that the intrinsic and ultimate value of the loan, as an investment, rests on state authority; i. e., the state which made it property, and which preserves it as property. Then it would seem that this kind of property, more than any other, ought to contribute to the support of the state government. And I suppose it is upon this ground that the legislature discriminates between corporation loans and private debts as objects of taxation. The artificial debtor, itself a creative grant, is so dependent upon the government — it lives and moves and has its being so entirely by the favor of the government — that not only ■what it owns, but what it owes, is thought fit to be taxed.” Says the court of appeals of New York, in People v. Com'rs, 23 N. Y, 224: “The fiction or maxim, ‘Mobilia personam sequuntur / is by no means of universal application. Like other fictions, it has its special uses. It may be resorted to when convenience or justice so require. In other circumstances, the truth and not the fiction affords, as it plainly ought to afford, the rule of action. The proper use of legal fictions is to prevent injustice. ‘No fiction/ says Blackstone, ‘shall extend to work an injury; its proper operation being to prevent a mischief or remedy an inconvenience which might result from the general Tule of law.’ So, Judge Story, referring to the sitas of goods and chattels, observes: ‘The general doctrine is not contro
It is earnestly insisted that these foreign money lending corporations have many millions of money loaned in this state on mortgages on land, and that they pay no taxes in return for the protection they get from the state whose courts and laws alone make their securities available. This is, beyond all controversy, a great wrong to the people of this state, whether such money lenders be nonresident persons or nonresident corporations. The constitution of the state makes it the duty of the legislature to tax all property not legally exempt; and when the present defect in the law, in this regard, is brought to its attention, it is not to be doubted that the legislature will promptly rectify the situation.
We make a closing observation: The Multnomah County Case is not applicable here because it was in construction of the act of Oregon authorizing such taxation. The case in 92 Md., 509, 48 Atl., 78, 52 L. R. A., 760, 84 Am. St. Rep., 517, has no application for the reason that in that state the statute of 1896 fixed the situs of the mortgagee’s interest for taxation in the county where the land was located, and for the further reason that in Maryland the mortgagee’s interest is more than a mere lien. And it will be found, upon examination, that the
The case of New Orleans v. Stemple, 175 U. S., 309, 20 Sup. Ct., 110, 44 L. Ed. 174, will be seen upon proper analysis, to fall within the principle of those cases defining what “a business situs” for the mortgages of this sort is. The supreme court of the United States in that case say, as pointed out by counsel for appellee: “Eirst, that the property in question was clearly property arising from business done in Louisiana, being property of the deceased, a resident of New Orleans; second, that the same had never been out of the state, but that the money was still on deposit in New Orleans banks, and the notes and mortgages were still in New Orleans in the hands of the
We have given these cases the most painstaking consideration, and our conclusions are: First, that the legislature has the power to fix the' situs of a mortgagee’s interest in land, whether it be an estate in the land or a mere chose in action in this state for the purpose of taxation, such legislation having been declared in the Multnomah County Case “not a deprivation of property without due process of law,” and not a denial of “the equal protection of the laws”; second, that the legislature of this state has not yet passed such a statute; and, third, that we commend to the earnest consideration of the legislature, at its next session, the prompt passage of a duplicate of the Oregon law. The provisions of this statute tax the interest of the mortgagee to him as land, and the rest to the mortgagor, thus avoiding double taxation, and, having been upheld by the supreme court of the United States, will be unassailable.
We acknowledge ourselves greatly indebted to the very able briefs of counsel on both sides, and we direct the reporter to set them out in full.
Affirmed.