43 Ark. 525 | Ark. | 1884
At the July term 1883, the appellee, Rumphj' applied to the county court, by way of appeal from theBoaid of Equalization, to correct his assessment of personal property for taxation, showing : That-in the preceding January he had sold and conveyed to Patrick Gaughan, certain lots in Camden for five thousand dollars, and taken notes for four thousand dollars of the purchase money, secured by deed of trust on the land ; that the lands had been assessed at their proper value to Gaughan; and that the notes had also been assessed in the name of petitioner against his protest. Pie insisted that this amounted to double taxation, and prays that his note may be stricken from his assessment. T-Tis prayer was refused and Rumph appealed to the circuit court, where the county demurred to the petition. The demurrer was overruled, the county declined to plead further, and judgment was rendered in favor of petitioner. From this the county appeals here.
The question presented is, can land and a note given for the purchase of it be both taxed in the hands of different parties.
It is first contended that notes cannot be taxed at all, inasmuch as they are choses in action, and not tangible property.
In (his state the question as to whether choses in action are property, has been set at rest by judicial decision. By the constituí,ion of 1868 the personal property “of any resident to the value of $2000, to be by him selected,” was made exempt from execution. It was held in Probst & Hilb v. Scott, 31 Ark. 652, that he might select a debt due him, so as to absolve it from process of garnishment ; and this was followed under the present constitution in Winter & Co. v. Simpson et al, 42 Ark. 410.
It is further contended, in support of the judgment below, that if notes be generally taxable, theSe are, nevertheless exempt; because they represent land, and the land has been assessed to the purchaser at its full value. This, it is said, amounts to double taxation,'and it is illustrated by saying that if everybody should sell his real estate on a credit, the taxable property of the county would be doubled. The argument is striking and plausible, but there seems to underlie it a fallacy.
There is no positive prohibition of double taxation-; that is, of property and that which represents it in different hands, whilst each is taxed with what he owns uniformly with other members of the community. A note given for land is no more, nor less valuable than one given by a nonresident for property out of the state; or one given for valuable services rendered; or for luxuries consumed in the use. Why should one be exempt and the other taxed, when the notes are alike and of equal value. This would violate the provision for uniformity. The corpus of the land is taxed according to its value, but that is the business of the purchaser alone. The vendor who holds the note has no concern with that. His note is valuable to him. It is property for which he ought to be taxed also.
The fallacy consists in looking at the note and the land as the same property. The land is only the consideration for it, but it has no further connection with it. In the present case a security on the land was taken, but it would not have altered the aspect of matters if that security had been merely personal. The two kinds of property are neither the same nor representing each other. The holder of the notes is taxed for what he owns — for something having a real value— representing not land, but the fruits of the future industry, or good fortune perhaps of the debtor, by which he means to pay. On the other hand the purchaser is taxed upon land for which he owes. It may be presumed this was considered in the amouut of the purchase price, as something to be deducted Irom the rents and profits, before anything could go towards payment of the note. Moreover, under our Revenue law he gets, to the amount of his debt, a credit on his own taxable credits; which the state concedes perhaps on the very ground that this debt may be taxed as a credit to some one else.
We think notes may properly be, and have been made taxable by the Revenue act of 1883; and that the honorable circuit court erred in directing a credit of the notes in question, to be made on the tax books in favor of appellee.
Reversed and remanded for further proceedings in accordance with law and this opinion.