5 Kan. App. 90 | Kan. Ct. App. | 1897
As Ave view the matter there is only one
question in this case, and that is : Was the note in question taxable in Jackson County, where the payee resided? If it was properly taxable there, then, under the decision of the Supreme Court in Ryan v. Comm’rs of Leavenworth Co., (30 Kan. 185,) and Life Association v. Hill, (51 Kan. 636,) the injunction cannot be maintained.
This principal question can properly be subdivided into two propositions :
I. What is the situs for taxation of a debt evidenced
“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 sitios, 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.”
In Railroad Co. (Cleveland, Painesville and Ashtabula) v. Pennsylvania, (15 Wall. 324,) Mr. Justice Field said: “Other personal property, consisting of bonds, mortgages, and debts generally, has no situs independent of the domicile of the owner.” ' .
In Mo. Pac. Rly. Co. v. Sharitt, (43 Kan. 379,) Mr. Justice Valentine, in concurring says : “The situs of a debt is either with the owner thereof, or at his domicile, or where the debt is to be paid.”
. There are undoubted exceptions to this rule, as in Fisher v. Comm’rs of Rush Co., (19 Kan. 414,) and Wilcox v. Ellis, (14 id. 588,) but this case does not come under the terms of any such exception.
II. Who is the owner for purposes of taxation of such indebtedness? The American and English Encyclopedia of Law, (vol. 18, p. 649,) says, in relation to bonds and mortgages deposited as collateral security : “ The pledgor holds the general property in the bond and mortgage, the pledgee having a special property for his advances.” Citing O’ Dougherty v. Rem. Paper Co., 81 N. Y. 496.
On page 652 of the same volume the author says :
“The pledgor may sell the property pledged, subject*94 to the lien, of the pledgee.” Citing a long list of authorities.
On this question we do not think there is any serious dispute among authorities. To our minds the reasoning is conclusive as to its situs for taxation. We presume that it will not be disputed that, as a rule, property not used for some excepted public purpose should bear its share of the public burdens ; and if it is admitted, as it must be, that the note in controversy should pay taxes somewhere, who in equity should be required to pay them? Surely not the pledgee. It is his duty to pay taxes upon the twenty-eight hundred dollar note he owns, and to compel him to pay taxes upon the six thousand dollar note in which he has no interest except as security, would be a gross injustice, as twenty-eight hundred dollars is all the interest he-has in both notes.
The principle stated above, that the payee of the note in controversy is properly chargeable with taxes thereon, also disposes of the fourth assignment of error in plaintiff’s brief, as, under paragraph 6847, General Statutes of 1889, debts secured by liens on real estate are not of the class of credits from which lia«bilities can be deducted under paragraph 6851. See Lappin et al. v. Comm’rs of Nemaha Co., 6 Kan. 403, and Life Association v. Hill, supra. The judgment of the court below will be affirmed.
