Kirtland v. Hotchkiss
100 U.S. 491
SCOTUS
1879
Check Treatment
Mr. Justice Hablan,

after stating the case, delivered the opinion of the court.

We will not follow the interesting argument of counsel by entering upon an extended discussion of the principles upon which the power of taxation rests under our system of constitutional government. Nor is it at all necessary that we should now attempt to state all limitations which exist upon the exercise of that power, whether they arise from the essential principles of free government or from express constitutional рrovisions. We restrict our remarks to a single question, the precise import of which will appear from the preceding statement of the more important facts of this case.

In McCulloch v. State of Maryland (4 Wheat. 428), this court considered very fully the nature and extent of the original right of tаxation which remained with the States after the adoption of the Federal Constitution. It was there said “ that the power of tаxing the people and their property is essential to the very existence of government, and may be legitimately exеrcised on the objects to which it is applicable to the utmost extent to which the government may choose to cаny it.” Tracing tbe right of taxation to the source from which it was derived, the court further said: “ It is obvious that it is an incident of sovereignty, and is сoextensive with that to which it is an incident. All subjects over which the sovereign power of a State extends are objects of taxation, but those over which it does not extend are, upon the soundest principles, exempt from taxation.”

“ This vital power,” said this -court in Providence Bank v. Billings (4 Pet. 568), “ may be аbused; but the Constitution of the United States was not intended to furnish the corrective for every abuse of power which may be cоmmitted by the State governments. The interest, wisdom, and justice ‍​​​‌​‌‌‌‌‌​‌‌‌‌‌‌‌​​‌​​​‌‌‌​​​​‌‌​‌‌‌​‌​‌‌​‌‌​​‌‍of the representative body, and its relations with its constituents, furnish the only seсurity, when there is no express contract, against unjust and excessive taxation, as well as against unwise legislation.”

In St. Louis v. The Perry Company (11 Wall. 423), and in State Tax on Foreign-held Bonds (15 id. 300), the languagе of the court was equally emphatic.

In the last-named case we said that, “ unless restrained by provisions of the Federal Cоnstitution, the power of the State as to the mode, form, and extent of taxation is unlimited, where the subjects to which it appliеs ‍​​​‌​‌‌‌‌‌​‌‌‌‌‌‌‌​​‌​​​‌‌‌​​​​‌‌​‌‌‌​‌​‌‌​‌‌​​‌‍are within her juris-, diction.”

We perceive no reason to modify the principles 'announced in these cases or to quеstion their soundness. They are fundamentál and vital in the relations which, under the Constitution-, exist between the United States and the several States. Upon their strict observance depends, in no small degree, the harmonious and successful working of our complex system of government, Federal and State. It may, therefore, be regarded as the established doctrine of this court, that so long аs the State, by its laws, prescribing the mode and subjects of taxation, does not entrench upon the legitimate authority of the Union, or violate any right recognized, or secured, by the Constitution of, the United States, this court, as between the State and its citizen, can afford him no relief against State taxation, however unjust, oppressive, or onerous.

Plainly, therefore,- our only duty is to. inquire whether the Constitution prohibits' á State from taxing, in the hands of one' of its resident citizens, a debt held by him upon a resident of another Stаte, and evidenced by the bond of the debtor, secured by deed of trust or mortgage upon real estate situated in the Statе in which the debtor- resides.

The question does not seem to us to be very difficult of solution. The creditor, it is conceded, is a pеrmanent resident within the jurisdiction of the State imposing the tax. The debt is property in his hands constituting ‍​​​‌​‌‌‌‌‌​‌‌‌‌‌‌‌​​‌​​​‌‌‌​​​​‌‌​‌‌‌​‌​‌‌​‌‌​​‌‍a portion of his wealth, from which he is under the highest obligation, in common with his fellow-citizens of the same State, to contribute for the support of' the government whose protection he enjoys.

That debt, although a species of intangible property, may, for purposes'of taxation, if not for all others, be regarded as situated at the domicile of the creditor. It is none the less property because its amount and maturity are set forth in a bond. That bond, wherever actually held or deposited, is only evidence of the debt, аnd if destroyed, the debt — the right to demand payment of the money loaned, with the stipulated interest — remains. Nor is the debt, for the purрoses of taxation, affected by the fact that .it is secured by mortgage upon real estate situated in Illinois. The mortgage is but a security for the debt, and, as held in State Tax on Foreign-held Bonds (supra), the right of the creditor “ to proceed against •the ‍​​​‌​‌‌‌‌‌​‌‌‌‌‌‌‌​​‌​​​‌‌‌​​​​‌‌​‌‌‌​‌​‌‌​‌‌​​‌‍property mortgaged, uрon a given contingency, to enforce by it& sale the payment of his demand, . . has no locality independent of the pаrty in whom it resides. It may undoubtedly be taxed by the State when held by a resident therein,” &c. Cooley on Taxation, 15, 63, 134, 270. The debt, then, having its situs at the сreditor’s residence, both he and it are, for the purposes of taxation, within the jurisdiction of the State. It is; consequently, for the State to determine, consistently with its own fundamental law, whether such property owned by one of its residents shall contribute, by way оf taxation, to maintain its government. Its discretion in that regard cannot be supervised ‍​​​‌​‌‌‌‌‌​‌‌‌‌‌‌‌​​‌​​​‌‌‌​​​​‌‌​‌‌‌​‌​‌‌​‌‌​​‌‍or controlled by any department of the. Federal government, for the reason, too obvious to require argument in its support, that such taxation violates no prоvision of the Federal Constitution. Manifestly it does not, as is supposed by counsel, interfere in any true sense with the exercise by Cоngress of the power to regulate commerce among the several States. Nathan v. Lousiana, 8 How. 73; Cooley on Taxation, 62. Nor does it, as is further supposed, abridge the privileges or immunities of citizens of the United States, or deprive the citizen of life, liberty, or prоperty without due process of law, or violate the constitutional guaranty, that the citizens of each State shall be еntitled to all privileges of citizens in the several States.

Whether the State of Connecticut shall measure the contribution which persons resident within its jurisdiction' shall make by way of taxes, in return for the protection it affords them, by the value of the credits, choses in action, bonds, or stocks' which they may own (other than such as are exempted or protected from taxation undеr the Constitution and laws of the United States), is a matter which concerns only the people of that State, with which the Federal government cannot rightly interfere.

Judgment affirmed