109 Ky. 770 | Ky. Ct. App. | 1901
Affirming.
In 1887 William M.' Fishback died in Fayette county, leaving a will by which he devised his property, after the payment of his debts, to his wife, Martha L. Fishback, for life, with power to dispose of a third thereof at her death, and disposing of the other two-thirds among certain relatives at her death. Power was given her to sell for reinvestment the property purchased, to be held upon the same terms and conditions as that sold. On December 10, 1894, as the result of some difference with the remainder-men, Mrs. Fishback executed a deed of trust to appellee company, conveying to it all the personal property held by her under her husband’s will, reciting that certain of the remainder-men objected to 'her holding the estate without executing a new bond, and that the property was to be held by the company, as trustee, “on the terms and conditions that said second party shall take possession and control of sai'd property and hold the same for the sole use of first party herein during her lifetime, and at her death to distribute the corpus of said trust fund according to the provisions of said will of William M. Fish-back. The second party shall collect the income and interest thereon, and pay the same over to first party, after deducting taxes and its commissions for managing said trust, which commission is not to exceed five per cent, on the income. Second party is hereby authorized to sell or dispose of any of said property, or to collect any of the aforesaid notes or securities of said trust property arising from any source, either by loaning the same upon good personal or mortgage security, or investing the same in interest-bearing -stocks and bonds, or in real estate, as it may see fit, and from lime to time may transfer, collect, or change said investment and reinvest the proceeds as afore
From the undenied averments of the pleadings it appears that Mrs. Fishback for about fifteen years before her death had been a resident of Jefferson county, that the notes covered by the deed of trust are not secured by mortgage upon property in Lexington, and that the remainder-men who are entitled to the assets are not residents of Lexington, excepting three who are entitled to three-fifty sixths of the estate. The main question for decision, therefore, is whether personal property held by a trustee is taxable at the residence of the trustee, or of the beneficiary. There can be no doubt that the general rule is that the situs of personal property is presumed to be that of the domicile of the owner, and is there taxable. This has been too frequently decided in this and other States to admit of question, Com. v. Hays, 8 B. Mon. 1; Thomas v. Mason County Court, 4 Bush, 136. The averment in appellee’s reply, therefore, that none of the makers o-f ‘the notes which compose the estate in question resides in Lexington, and that none of the notes is secured by mortgage or lien upon realty in that city, is immaterial, and, indeed, seems to have been made solely for the purpose of bringing the property involved within the supposed scope of the reasoning in the Sherley case, 80 Ky., 71. There seems, also, little doubt, and it may be conceded, that the presumption as to the
“Section 4023. The holder of the legal title, and the holder of the equitable title, and the claimant or bailee in possession of the property, on the fifteenth day of September of the year the assessment is made, shall be liable for the taxes thereon; but, as between themselves, it shall be the duty of the holder of the equitable title to list the property and pay the taxes thereon, whether the property be in possession or not at the time of the payment.
“Section 4024. All estate, real and personal, and all interest in such estate, named and specified in the taxbook, shall be assessed for taxation, and the tax paid by the owners thereof to the persons authorized by law to receive the same, unless otherwise speciallv provided.”
In general it may be said that the provision in section
But appellant also relies upon sections' 3174, 3179, Kentucky Statutes, being sections of the act of March, 1894, for the government of cities of the second class. Section 3174 provides in general terms for a revenue for the city from an ad valorem tax, by the assessment of all real and personal estate within the corporate limits thereof subject to taxation for State purposes. This section seems to show nothing upon the question of whether the situs of personalty follows the residence of the real owner, or that of the legal title owner. Section 3179 requires notice to be given by the assessor “that all persons owning or having in their possession or under their control as agent, guardian, committee, executor, administrator, curator, trustee, receiver, commissioner or otherwise, tangible or intangible property, on tbe fifteenth day of September following, are required on or before the first day of October to give him a true and complete list of tbe same, with true cash value thereof,” etc. But we think this provision is a requirement merely that property shall be listed which is taxable in the city, and that this statute does not at all settle the question now before us. There is nothing, we think, in the sections to which we have been cited to alter the presumption arising from a fair construction of sections 4023 and 4024 that, as the beneficial owner is made primarily responsible for the taxes, his residence is the situs of the property for taxation. It is true that it is laid down by the text writers that, in general,
When we come to tbe consideration of tbe authorities in this State upon the subject, there seems little difficulty. In tbe case of City of Louisville v. Sherley, 80 Ky., 71, the guardian lived in tbe city of Louisville, and tbe wards continued their residence at the domicile of their parents outside of tbe city limits. In that case it was held — and no question has ever been made of the absolute propriety of tbe decision — that: “Tbe proper place to list personal property in this State, or rather, its value under tbe equalization law, is in tbe county where the owner lives; and, as to tbe infants living in the county of Jefferson, their personal estate should have been listed with the county assessor. This property is subject to taxation for State and county purposes, but not for the support of the city government.” There is considerable argument in the opinion to the effect that the wards derived no benefit from city taxation, as the security of their personalty was provided by the machinery of the State government, and as they were not entitled to the benefits of the public-school system of the city. Some argument is attempted to be drawn on behalf of appellant here from the fact that the trustee in this case does obtain benefits from the city government of Lexington, which inure to the benefit of its cestui que trust, in the way of police protection, facilities for attending to the beneficiary’s business, etc. To this it may be replied that no more benefit is received by the beneficiary in the case at bar than was received by the infants in the Sherley case. In the one case the
Considerable argument has been advanced as to the possibility of escaping taxation altogether upon personalty if it shall be regarded as taxable a.t the residence of the beneficia^, and not at that of the trustee. On the other hand, it is urged that a different construction will work great hardship to corporations and others who make a business of .seeking such fiducial business, and to beneficiaries whose property is in- the hands of oity trustees. These arguments, however, seem to us more properly to be addressed to the discretion of the lawmaking power, in whose hands the whole matter rests. We think the legislative intention has been expressed in favor of taxing such property at the residence of the real or beneficial owner. The judgment is therefore affirmed.