This is an appeal from .a judgment in favor of defendants and from an order denying the plaintiffs’ motion for a new trial. The action was brought to recover twenty-eight thousand four hundred .and forty-five dollars taxes paid by plaintiff under protest and claimed to have been illegally assessed. Theresa Fair died testate in September, 1891, being at said time a resident of the city and county of San Francisco, and leaving a will in which plaintiffs were named as executors and trustees. In October, 1891, the will was admitted to probate in the city and county of San Francisco, and plaintiffs appointed executors thereof. Among the assets of the estate were certain bonds of the Southern Pacific Bailroad Company of Arizona, and certain other bonds of the West Shore *681 Bailroad Company of Hew York, of the aggregate value of one million two hundred and eighty-two thousand dollars. In August, 1894, .the administration of the estate was closed and a decree of final distribution entered, whereby the said bonds, with certain other real and personal property, were distributed to plaintiffs as trustees, under and in pursuance to the terms of the will. At the time the decree of distribution was made Mackay was and has continued to be .a resident of the state of Hevada, but has lived and transacted business during the greater part of the time in Hew York City, while Dey was and is a resident of the city and county of San Francisco. The bonds were, at the time they were assessed, and have since been kept in Hew York City, in the American Exchange Bank, deposited in the joint names of plaintiffs as trustees. The trust estate consists of other real and personal property situate and kept in California. The beneficiaries under the trust reside in Hew York, and the interest upon the bonds, as well as the principal, is payable in that city.
The assessor of the city and county of San Francisco assessed the bonds as being property owned by and in the possession of plaintiffs, as trustees, on the first Monday in March, 1895. The question to be here determined is the situs of the bonds for the purposes of taxation.
The bonds are evidences of indebtedness due or to become due from the Arizona corporation and the Hew York corporation to the plaintiffs as trustees and as the legal owners thereof. The weight of authority is that a debt so due or to become due should be taxed at the place of residence of the creditor or owner, and that the situs of the debt is that of its owner, and that it is not property in the state of the debtor. (Burroughs on Taxation, sec. 41;
San Francisco v. Lux,
Judge Cooley, in his work on Taxation, second edition, page 372, says: “The general rule that personalty is to be assessed to the owner where he has. his domicile has been mentioned. This .rule is applicable to bonds and other choses in action, though the debtor resides out of the state, and though they are secured by mortgage on lands out of the state.”
In
Mackay v. San Francisco,
The discussion is, therefore, narrowed to the proposition as to whether the same rule applies to plaintiffs as trustees after the estate had been closed and the property distributed to them as such trustees. If the property had been distributed directly to the heirs and possession given to them, they being nonresidents of the state and the bonds being out of the state, there would be no doubt but that the state of California could no longer tax it. But here we have the property which during the lifetime of Mrs. Fair had its situs in San Francisco. After her death *683 its situs continued here during administration until August, 1894. Did its situs then change? It is conceded that plaintiffs were appointed trustees under the will of Mrs. Fair, and the decree distributed the property to them as such trustees. The plaintiffs therefore, as trustees, were the owners of the legal title to the .property at the time of the assessment.
The general rule is, that personal property in the hands of a trustee is to be assessed to him. at his place of domicile. (Cooley on Taxation, 3d ed., 375; Burroughs on Taxation, 224.)
The reason given is that the trustees are the representatives of the .fund, and the fund contributes to the support of the state through the trustees. The property under this rule could not be assessed to the plaintiffs in San Francisco, because that is the place of domicile of only one of them. It could not be assessed to them in Nevada, because that is the place of domicile of only one of them. The property is not in California nor in Nevada, but, being intangible personal property, is said by defendants to follow the person of the owner. If it follows the person of the owner, it could not, as matter of law, be said to follow the person of the plaintiff who resides in California and to forsake and refuse to follow the person of the plaintiff who resides in Nevada. It follows one as much as the other, and its situs is that of the place of domicile of its owners. Therefore, on the first Monday of .March, 1895, the plaintiff Mackay was a resident of Nevada and was the owner of an undivided one-half of the bonds, and, neither the property nor the owner being within the jurisdiction of the state, the assessment, as to ’Mackay’s interest, was void. The language of the constitution is: “All property in the state .... shall be taxed in proportion to its value.”
The interest of Mackay in this property was not "property in the state” within the meaning of the constitution. It was-said by Chief Justice Marshall in
McCulloch, v. Maryland,
*684
It was held hy the court of appeals of Maryland in
Mayor etc. of Baltimore v. Stirling,
This case was followed and approved in the late case of Appeal
Tax Court etc. v. Gill,
We are therefore of the opinion, both upon principle and-authority, that the assessment as to plaintiff Mackay was void. Defendants claim that the property is still within the jurisdiction of California and in charge of the superior court of the city and county of San Francisco by virtue of the Code of Civil Procedure, section 1699, which provides: “Where any trust has been created by or under any will, to continue after distribution, the superior court shall not lose jurisdiction of the estate by final distribution, but shall retain jurisdiction thereof for the purpose of the settlement of accounts under the trust.”
W¿ do not think under the section that the court retained any jurisdiction except for the one purpose of .settling the accounts of the trustees. It was no doubt intended hy the legis-
*685
lature that the trustees, .without any independent proceeding or without being called upon by the beneficiaries, might file their accounts in the court in which the estate was administered and have it settled as a matter of convenience. It could not have been intended that the court should retain jurisdiction as to the property of the trust, or that its jurisdiction should be exclusive. The administration was closed, the accounts of the executors allowed, and the property distributed to them in a different capacity. By their discharge as executors they were as completely separated from the business of the estate as if they had been dead.
(Willis v. Farley,
Suppose that in this case the plaintiff Dey immediately after the decree of distribution had removed to and continued to live in Hew York; how could the trustees have been held hy the courts of San Francisco within their exclusive jurisdiction? If the beneficiaries and the trustees, after the decree of distribution, had all become residents of Hew York, the property also being there, how could section 1699 prevent the courts of Hew York from exercising jurisdiction or give the San Francisco courts jurisdiction? Oounsel for defendants rely upon Lewis v. County of Chester, 60 Pa. St. 328, and a sentence used by Judge Cooley, in his work on Taxation, page 376, in which he says: “If the fund is in charge of a court it is taxable in the juris *686 diction having control of it.” The sentence from the text-book refers as authority to the single case of Lewis v. County of Chester, supra. In the latter case the estate had not been distributed, and the same rule was followed as in Mackay v. San Francisco, supra. It is true the court had settled the accounts of the executrix as such, and the decree provided: "That said executrix keep said balance invested, and that she retain the same on trust to apply the income thereof pursuant to the trusts and limitations of the said last will and testament until the further order of this court, and it is ordered that the said executrix be hereafter entitled to expend the sum of fifteen hundred dollars annually out of the income of said estate for the support and maintenance of each of said infants.” And the court in its opinion said: "And distribution yet remains to be decreed upon the further order of the surrogate.”
Therefore, the case is not authority in support of the proposition that the superior court of San Francisco has .control of the bonds distributed to plaintiffs. It is claimed by defendants that plaintiffs cannot recover any less than the whole tax, for the reason that the protest, instead of specifying that one-half the tax upon the bonds is void, is directed to the whole tax. We think the protest was sufficient. It specified that Mackay is not a resident of the state, that the bonds are in Yew York and are bonds of foreign corporations. The protest, while it specified and pointed out that the .whole assessment was void, did not for that reason fail to point out and show that the assessment of all the property owned by Mackay was void. The greater includes the less, and, although the whole assessment was claimed to be void, the protest showed that the whole assessment as to Mackay was void. The notice was a substantial compliance with the statute.
(Mackay v. San Francisco, supra; People v. Assessors of Albany,
It is claimed by plaintiffs that the bonds were in the exclusive control and possession of plaintiff Mackay and were in Yew York for the purposes of sale and reinvestment, and had thus acquired what is termed in some of the cases a "¡business situs” in Yew York.
The authorities generally agree that where the owner is not a resident of the state in which the credits are situated, and
*687
the credits are in the possession and control of a local agent, who holds them for the purpose of transacting a permanent business, and of investing and reinvesting the proceeds from the principal or interest in such manner that the property or credits comes in competition with the capital of the citizens of the state in which the agent resides, that the credits have a situs for the purposes of taxation in the place of residence of .the local agent.
(New Orleans v. Stempel,
*768 768 Ordinance, OFFICE AND OFFICERS (Continued). county and township officers to be adjusted in accordance with their respective duties, under a classification of counties by population made for that purpose. (Knight v. Martin, 245.) See Oaths. ORDINANCE. See Municipal Corporations; Negligence, 13; Nuisance, 6. PARTIES. 1. Action to Quiet Title—Transfer op Interest After Judgment— Substitution of Parties—Construction of Code.—After the rights of the parties in an action to quiet title have been finally ascertained and determined, and judgment thereon entered, a transferee of the interest of the successful party takes the same subject to the judgment and with all of its protection; and the provision of section 385 of the Code of Civil Procedure, allowing the transferee of a cause of action to be substituted in the action, is inapplicable. That section relates to a transfer of interest made before the entry of judgment in the action. (Emerson v. McWhirter, 2G8.) 2. Permissive Statute—Discretion.—The provision of section 385 of the Code of Civil Procedure that “the court may allow the person to whom the transfer is made to be substituted in the action or proceeding” is permissive; and the discretion of the court in making the order is to be exercised in view of all the circumstances attending the application. (Id.) 3. Substitution upon Appeal — Identity of Attorney—Denial of Motion.—Where the assignee of the successful party, who had purchased his interest after judgment, moved to be substituted in his stead upon appeal, and the motion showed that the attorney for the respondent was the attorney both for the original party and for the party moving for the substitution, there is no occasion for making the order, and the motion should be denied. (Id.) See Attorney and Client, 9; Estates of Deceased Persons, 8, 9; Specific Performance. PARTITION. See Insolvency, 16. PARTNERSHIP. See Pleading, 8. PARTY-WALL. See Coterminous Owners, 3. PLACE OF TRIAL. 1. Change of Place of Trial—Disqualification of Judge—Transfer to “Nearest” or “Most Accessible” Court.—In case of the disqualification of a judge by reason of his interest in the subject matter of the action, he is in duty bound to transfer the cause
*687 We do not think the facts of this case bring the bonds as to the interest of plaintiff Dey within the rule. As trustee he is the legal owner of an undivided one-half of them. They are the same identical bonds owned by Mrs. Fair at her death. They have not lost their identity .simply by being on deposit in a bank in Hew York City. They have not been sold and the proceeds reinvested in Hew York or elsewhere. We advise that the judgment be reversed and the court below directed to enter judgment on the findings in favor of plaintiffs for the sum of fourteen thousand two hundred and twenty-two dollars and fifty cents, and interest thereon at the legal rate since the nineteenth day of November, 1895.
Chipman, C., and Gray, C., concurred.
For the reasons given in the foregoing opinion the judgment is reversed, and the court below directed to enter judgment on the findings in favor of plaintiffs for the sum of fourteen thousand two hundred and twenty-two dollars and fifty cents, and interest thereon at the legal rate since the nineteenth day of Hovember, 1895.
McFarland, J., Temple, J., Henshaw, J.
Hearing in Bank denied.