Imagens das páginas

ble rights of man which is guaranteed to cial acts of the general assembly for the reevery citizen by the Bill of Rights (Const. lief of sureties in cases in which it was art. 1, § 1), subject only to such restric- claimed that the principal was not in tions as clearly appear to be for the general fault. Some of these acts are meritorious, welfare. The mere fact that the general as many of them improvident, and most of sembly has enacted a law which narrows them unconstitutional. It argues nothing the liberty of contract as to the whole peo in favor of the legislation which is assailed ple, or as to a class of citizens, is not de- here that sureties sometimes seek to escape cisive. If it were so, the constitutional from the consequences of their contract of guaranty might be made a dead letter by suretyship. The fact remains that those bills passed through the procurement of in- whose interests are protected by personal terested parties, or in response to the de- bond rarely lose. We have not been admands of extremists in times of popular ex vised of any necessity for, or general decitement. It is the province of the courts mand for, the abolition of personal security to determine whether a given statute infrin. and the substitution therefor of corporate ges the Constitution, which is the supreme security, and the reasons which we have law; and therefore it is within the province given persuade us that the public welfare of the courts to decide whether the common does not require it. welfare demands a restriction of the right of But further, not only is the person who individuals to contract freely for their own gives a bond deprived of the right to obtain benefit or convenience. It is the undoubted it of whomsoever and however he pleases, right of the general assembly to require subject only to the requirement that it realbonds to be given "for the faithful perform- ly protects and secures the obligee, but the ance of official or fiduciary duties, or the obligee is compelled to pay a security comfaithful keeping, applying, or accounting pany for protection. The burden is not put for funds or property, or for one or more on the officer or fiduciary to give protection, such purposes," and to make reasonable re- but on the public or estate to obtain proquirements as to execution, approval, and tection. The requirement of the statute is security to effectuate fully the purposes that an executor, administrator, guardian, thereof. But, unless the public welfare trustee, or other fiduciary shall give a secushould justify and require it, the power of rity company as bondsman, and that the esthe general assembly is so limited by the tate shall pay for it, which is a taking of Constitution (art. 1, § 1) that it cannot private property for private uses without deny or restrict the liberty of the officer compensation; and that a public officer or fiduciary to obtain or contract for a shall give bond with a surety company as bond on terms satisfactory to himself. Be surety, the premium to be paid out of the fore the enactment of this statute an offi- public funds. The effect of the latter procer was at liberty to present a bond signed vision is to require the state, county, townby personal sureties or by a surety com- ship, or municipality to pay to the enrichpany or companies, as his own interest or ment of security companies each year vastconvenience might suggest. The right of ly more than it would lose by defaulting choice between the classes of sureties is public officials; and it thus becomes evinow denied him. It is now made compul. dent that it would be more economical for sory upon him to give bond signed by sure the public to become its own insurer of the ty companies, and personal security is in ef. good faith of its officials, which would refect abolished. It is very plain that the se- sult, perhaps, in no official bond in any case. curity companies may be greatly benefited It does not seem to us, therefore, that any

this legislation, but adequate part of this statute was promoted by concorresponding benefit or protection to the siderations of public necessity or public general public, such as would justify such welfare, and thence it follows that it is an a radical and drastic limitation upon in- unconstitutional restriction upon the libdividual rights, is not apparent. The erty to contract which is guaranteed by amount of loss to the state, county, town article 1, § 1, of the Constitution of this ship, or municipality on official bonds, or to state. the beneficiaries under bonds of executors, It is contended on the part of the readministrators, guardians, trustees, or other spondent that no citizen has an inalienable fiduciaries, comparatively speaking, is tri- right to act as a legal representative or pubfling. Indeed, it is possible that the loss is lic officer; that the general assembly has no greater than would result when the power to provide for the descent and disbonds shall be signed exclusively by incor- tribution of estates, and for the appointporated companies, which sometimes be ment and qualifications of executors and adcome insolvent as individuals do. It is true ministrators, including the giving of bonds; that the loss, if any default occurs, falls on that the general assembly has power to prethe sureties, and that there have been spe. I scribe the manner of election to a public




office, and the qualifications therefor; and both the protection and the benefit. If any that it logically follows from these prem- discrimination were necessary, it would ises that the general assembly has authority seem to be the better way to allow all es. to determine the kind and sufficiency tates, large or small, to procure personal of the security to be given. The general bonds or security-company bonds as they soundness of this argument is not to be might be able or might prefer, instead of questioned; but it is pressing the conclu- compelling the larger estates to pay tribute sion too far to maintain that the legislature to the surety companies, while the smaller may go beyond the purpose of the security estates, presumably less desirable risks to to be given, and may require things to be the surety companies, are still permitted to done which do not increase the protection give either personal bonds or bonds of seof the obligee, which abridge individual curity companies,-if the latter do not rerights without contributing to the general ject their applications, as the statute prowelfare, and which enrich a designated vides that they may do. class of sureties to the exclusion of all oth- We do not regard any of the cases cited

Such a conclusion would lead not only for the respondent as decisive of the questo violation of article 1, § 1, of our Con- tion now before us. The issue raised here stitution, as already shown, but of article is whether the general assembly may make 1, § 2, also, which declares that “govern security by security companies exclusive ment is instituted for the equal protection and compulsory. It is not whether corpoand benefit” of the people. This basic prin rations may be authorized to secure bonds, ciple of the Constitution is also violated nor whether the person giving bond may at when executors, administrators, guardians, his option give a bond signed either by pertrustees, or other fiduciaries whose bonds are sonal securities or by security companies. fixed at an amount not in excess of $2,000 Our conclusion is that the statute is unare excepted from the operation of the act. constitutional, and it is accordingly ordered No good reason for this discrimination is and adjuged that the demurrer to the anapparent. If personal bonds are a public swer be sustained and a peremptory urit of evil they should be abolished altogether. mandamus allowed. If bonds signed by surety companies are the only ones fit for the security of estates, all Spear, Ch. J., and Shauck, Price, and estates should be permitted to enjoy equally Crew, JJ., concur.



Plff. in Certiorari,



TION COMPANY, Piff. in Certiorari,


place named in the articles of incorporation as the home of the corporation is not its principal business, so as to make it taxable there, where substantially all the business for which it is organized is transacted and its funds kept at another place, under a statute providing that a corporation shall be taxable where its office is located by its charter, provided its business is actually transacted there, but that, if it shall establish its principal office in another place, then the place where it transacts its principal business shall be deemed its residence for

purposes of taxation. 2. A statute making all the property

of corporations engaged in maritime com. merce or navigation taxable only at the place designated in their charters as their general office for business violates a constitutional provision requiring a uniform rate of taxation.

[blocks in formation]

I. Scope of note, 431.
II. Essentials of jurisdiction, 432.
III. Localization of corporations, 433.
IV. Principal office as domicil.

VI. Legislative power to fix the situs of prop

erty for taxation, 441. VII. Personal property physically present in

the taxing jurisdiction, 442. VIII. Tangible property outside the state, 443. IX. Particular classes of property.

a. In general, 433.

b. Of railroads, 436. V. Effect of certificate of incorporation on

the question of domicil, 437.

a. Railroad rolling stock, 445.

b. Water craft, 447. X. Conclusion, 450.

1. Scope of note. This note is confined to the consideration of

3. The legislature has no power par Messrs. Graves & Hatch and Angell, tially to exempt from taxation the

Boynton, McMillan, & Bodman for property of corporations engaged in maritime commerce and navigation where the Consti- plaintiff's in certiorari. tution requires a uniform rule of taxation.

Mr. Timothy E. Tarsney for defendant 4. In determining the situs of personal in certiorari.

property for taxation, the legislature must regard the constitutional requirement

Carpenter, J., delivered the opinion of uniformity.

of the court:

Writs of certiorari bring before us for re(January 30, 1905.)

view three mandamus proceedings deterETITIONS for writs of certiorari to re

mined in the circuit court for the county of view judgments of the Circuit Court for Wayne. Each of the above-named relators Wayne County denying writs of mandamus is a corporation engaged in transporting to compel the board of assessors of the city goods by water, and each asks for a mandaof Detroit to strike an assessment upon (which the lower court refused to plaintiffs' property from the rolls. Affirmed. grant) compelling respondent to strike from The facts are stated in the opinion.

the assessment rolls an assessment on ac




cases decided in the United States concerning situs, in the note on Nature of railroad,wheththe legal places of taxation of the personal er real estate or personal property, to Webster property or corporations in the states of their Lumber Co. v. Keystone Lumber & Min. Co. 66 origin. It does not deal in general with any L. R. A. 33, div. XI., pp. 51 et seq. questions concerning the taxability of foreign The questions relating to the taxation of the corporations on account of personal property poles and wires of telegraph, telephone, light, which they own and use outside of their own heat, and power companies, street railways, states, except to present some cases illustrative gas and water mains, service pipes, and hyof the main theme, or those where peculiar drants are considered to lie outside of the point circumstances have made a particular corpo- under annotation, and need not be sought here. ration, for all practical purposes, a domestic For a case holding the mains, pipes, and one in a state in which it did not originate. hydrants of a water company assessable for

Neither does this note include cases relating taxes as part of the real estate and a note to inheritance or succession taxes involving of the pertinent decisions, consult Oskaloosa corporate, intangible property interests; and it Water Co. v. Board of Equalization, 15 L. R. takes no account of the situs of shares of stock A. 296. Another case in point in that behalt in foreign corporations at the domicil of the is Shelbyville Water Co. v. Illinois, 16 L. R. A. stockholder, whether that stockholder be 505. natural person or a domestic corporation.

For a note upon the residence of corporations The purpose of the note is to present the for the purposes of jurisdiction in the Federal cases pertinent to the maxim, Mobilia personam courts, the reader is referred to Stephens v. scquuntur, in its application to taxing a cor St. Louis & S. F. R. Co. 14 L. R. A. 184. poration in its home jurisdiction and within the limits of the United States.

11. Essentials of jurisdiction. None of the ground gone over in previous notes in this series respecting the taxation of

It is unnecessary to cite more than a few American corporations is again occupied. For especially apt cases to the point that either this reason, the reader is referred to the note the corporation itself, or the property of it to Sandford v. Poe, 60 L. R. A. 641, on Corpo. taxed, or both, to warrant a state in levying rate taxation and the commerce clause, where

a tax, must be under the dominion of the asthe subject of the state power to tax the in- sessing government. struments of commerce and the validity of

The authority of a legislature to impose taxes taxes thereon were treated at length; also to

extends over all persons and property within the note on Constitutional equality in the

the sphere of its territorial jurisdiction; but United States in relation to corporate taxation, where there is jurisdiction neither as to persons to Bacon v. State Tax Comrs. 60 L. R. A. nor property the imposition of a tax will be 321 ; also to that part of the note on Tax

ultra vires and void. St. Louis v. Wiggins ation of corporate franchises in the United Ferry Co. 11 Wall. 425, 20 L. ed. 192. States, to Louisville Tobacco Warehouse Co. v. Unless either the property or its owner is Kentucky, 57 L. R. A. 33, div. VII. C, 3, pp.

within a state, that state has no jurisdiction 88 et seq., dealing with the inquiry as to what

to tax either the one or the other. Dallinger constitutes doing business or employing capi

v. Rapello, 14 Fed. 32; Yost v. Lake Erie tal in a state so as to render a corporation Transp. Co. 50 C. C. A. 511, 112 Fed. 746. amenable to its tax laws; also to the part of Whether or not choses in action may, under the note on the Taxation of manufacturing certain circumstances, be subjected to taxation corporations in the United States, to Williams in a state where their owner has no domicil. v. Warren, 64 L. R. A. 33, divs. IV. and V. a, as several cases decide, they cannot be so taxed pp. 52-54, dealing with the right of a manu unless they have acquired what may be aptly facturing corporation to exemption from tax called a business situs at the place of taxation. ation in the place where it holds its meetings Herron v. Keeran, 59 Ind. 476, 26 Am. Rep. 87. of stockholders and directors and maintains We readily concede, said the Tennessee suan office; and finally, to the cases relating to preme court upon a recent occasion, when conthe taxation of railroad property, apparently sidering the situs of a corporation, that under personal but treated as real, or vice versa, with the Codes of all civilized nations jurisdiction a corresponding effect upon the question of ends where neither the person nor property

count of certain steamboats owned by it. tion Company also for the first meeting of Said steamboats during the season are en- | the directors elected at said stockholders' gaged in navigating the Great Lakes, and meeting. Substantially all the other busiare seldom in the city of Detroit. In the

ness of said Teagan Transportation Comarticles of incorporation of the first two pany which was not done on its boats was relators the township of Hamtramack, done in the city of Detroit. The manageWayne county, is named as the location of ment of the ordinary business of the last their general offices for business. In the two named relators was carried on by their articles of incorporation of the last-named

agent at Cleveland. Their funds, however, relator, viz., the Wolverine Steamship Com

except those required “to pay the ordinary pany, the village of Utica, Macomb county, is named as the location of its general of running expenses of the boats and the offifice for business. At the place named as

cers and crew,” were received and disthe location of their offices relators never

bursed by their treasurer at Detroit; and it had any regular business office. All they may be inferred that this official at Detroit did there was to use the office or house of decided any business matters "outside the another for their annual stockholders' meet ordinary course” not necessary—that is, as ing, and in case of the Teagan Transporta- ' we infer, which he may decide to be not of the defendant is within the territorial juris- , state of their domicil wherein they own propdiction of the court. Young v. South Tredegar erty and exercise their functions, regardless Iron Co. 85 Tenn. 189, 2 S. W. 202.

of the location of their principal offices.

East Tennessee V. & G. R. Co. v. Atlanta & III. Localization of corporations.

F. R. Co. 15 L. R. A. 109, 49 Fed. 608;

Locomotive Engine Safety Truck Co. v. Erie The popular sense of the term "inhabitant"

R. Co. 10 Blatch. 307. Fed. Cas. No. 8, 453. is the same as resident, or one who lives in

When a foreign railroad is authorized to a place. An inhabitant necessarily implies an

extend and operate its line in another state by habitation. It requires no reflection to determine that in this 'sense a corporation resides therewith, it becomes to all intents and pur

a statute thereof, and does so in conformity nowhere. Hartford F. Ins. Co. v. Hartford, 3

poses, and subject to the same taxation as if, a Conn. 15.

corporation originating in such state. Com. A corporation as a mere ideal existence sub

v. Cleveland, P. & A. R. Co. 29 Pa. 370. sisting only in contemplation of law, an in

When the question is one of taxation it is visible being, can have no locality, occupy no

conceded that railway corporations are persons space, and hence can have no dwelling place, within the meaning of the provisions of the unless the legislature explicitly or impliedly Constitution of the United States in respect of establishes one for it in a particular place, due process of law and the equal protection of Wood v. Hartford F. Ins. Co. 13 Conn, 202, 33

the laws. Cleveland, C. C. & St. L. R. Co. v. Am. Dec. 395.

Backus, 133 Ind. 513, 18 L. R. A. 729, 33 N. The term "inhabitant" includes a corporation

E. 421. occupying an office or building in a town, ward,

And they are also conceded to be persons or village, and there conducting the business

within the meaning of a state constitutional for which it was incorporated. Especially is

provision giving every man a remedy by due this so with reference to the burdens of tax

course of law for injury to person, property, ation for public purposes.

Ontario Bank v.

or fame. Ibid. Bunnell, 10 Wend. 186.

The decisions that corporations are persons, A corporation is an artificial being, and has

and are deemed to have a local habitation, no dwelling either in its office, its warehouse, residence, or domicil 'for the purposes of taxits depots, or its ships. Its domicil is in the

It is unnecessary to legal jurisdiction of its origin irrespective of ation, are harmonious.

cite them upon this point here; they were exthe residence of its officers or the place where

hibited in the writer's note on Constitutional its business is transacted. It retains that domicil until it ceases to exist. Merrick v. Van

equality in the United States in relation to

corporate taxation, div. VII., p. 330, appended Santvoord, 34 N. Y. 208.

to the case of Bacon V. State Tax Comrs. 60 A corporation can have no legal existence in

L. R. A. 321. any state except by the law of that state. The legal entity or person which exists by force of law when a corporation is created can have no

IV. Principal office as domicil. existence beyond the limits of the state which brought it to life and endued it with its facul

a. In general. ties and powers. Ohio & M. R. Co. v. Wheeler, 1 Black, 286, 17 L. ed. 130.

In the absence of a statute, the rule is that In the jurisprudence of the United States a

personalty is to be taxed where the owner corporation is regarded as a citizen of the state

resides. Walton County v. Morgan County, 120 which created it. It has no faculty to emigrate. Ga. 548, 48 S. E. 243. It can exercise its franchise extraterritorially Personal property, prima facie, is returnable only so far as may be permitted by the policy for taxation where the owner resides. Morgan or comity of other sovereignties. St. Louis V. County v. Walton County, 121 Ga. 659, 49 Wiggins Ferry Co. 11 Wall. 425, 20 L. ed. 192. S. E. 776.

For the purposes of jurisdiction of the Fed- It is the rule, subject to some qualifications, eral courts corporations are conclusively pre- that personal property, with respect of its sumed to be residents of the states in which taxability, follows the residence of the owner. they were created, and of every district in the Sangamon & M. R. Co. v. Morgan County, 14

necessary—to submit to the board of di- cipal business shall be deemed its residence rectors.

for all the purposes of this act. If there The question of whether relators' prop- be no principal office in this state, then at erty is taxable in the city of Detroit de the place in this state where such corpopends upon the constitutional validity and ration or agent transacts business: Proconstruction of g 3834, Comp. Laws 1897. vided further, that all the personal property That section reads: "All corporate prop- of all corporations heretofore or hereafter erty, except where some other provision is organized under the laws of this state for made by law, shall be assessed to the corpo- the purpose of engaging in maritime comration as to a natural person, in the name merce or navigation shall be assessed only of the corporation. The place where its in the city, village, or township which is office is located in its articles of incorpo- stated in their original articles of associaration shall be deemed its residence: Pro. tion or in any amendment thereof heretovided, its business is actually transacted fore or hereafter made to be the location of at such office; but if it shall establish its their general office for business." This seeprincipal office in any other place than the tion was g 11 of the general tax law passed place named in its articles of incorporation, in 1893. See act No. 206, p. 358, Acts 1893. then the place where it transacts its prin- ' As originally enacted, the section contained III. 164, 56 Am. Dec. 497 ; Kennedy v. St. Louis, ferent rule or regulation upon the subject. V. & T. II. R. Co. 62 Ill. 395.

State ex rel. Kansas City, St. J. & C. B. R. It is the general rule of law that the domicil Co. v. Severance, 55 Mo. 378. of the owner is the place where, by a legal fic- As a general rule a private corporation will tion, his personal property is regarded as having be held to reside in the town where its principal its situs, and where it is to be taxed. Herron voflice is established. State, Warren Mfg. Co., Keeran, 59 Ind. 472, 26 Am. Rep. 87.

Prosecutors, v. Warford, 37 N. J. L. 397. The place where the business of a merchant A corporation must be deemed to have a is carried on is where he keeps for sale the residence at the place where its place of busimerchandise in which he deals, not where he ness is.

Conroe v. National Protection Ins. purchases or temporarily stores it; and that is ('o. 10 How. Pr. 403. its situs for taxation under a statute requiring The capital or personal property of a domesthe personal property pertaining to the business tic corporation in New York is assessable in of a merchant to be listed for taxation in the the ward where the principal financial business town or district where his business is carried of the company is transacted, or, if there is on. Minneapolis & N. Elevator Co. v. Clay, no such oflice, then in the town or ward County, 60 Minn. 522, 63 N. W. 101.

where are carried on the corporate operations. A debt has its situs at the residence of the People ew rel. Oswego Canal Co. v. Oswego, 6 creditor, and constitutes a portion of his Thorp. & C. 673. estate there; consequently, for the purposes of A corporation is embraced by a statute retaxation both the creditor and the debt are quiring local assessors to set down in the assesswithin the jurisdiction of the state which con- ment roll all taxable personal property of each tains that residence. Kirtland v. Hotchkiss, person in the taxing district above his debts. 100 U. S. 497, 25 L. ed. 562.

People ex rcl. Cornell S. B. Co. v. Dederick, 161 The residence of a corporation is for most N. Y. 195, 55 N. E. 927. legal purposes where its chief office or place A domestic corporation is taxable upon its of business is, and, except where it is by law personal property in the city where it has its otherwise provided, its personal taxes should principal office, under a statute declaring all be paid in that jurisdiction. Frankfort v. property in the state and all personal property Stone, 22 Ky. L. Rep. 502, 58 S. W. 373. belonging to the inhabitants thereof liable to

A corporation is taxable at its principal place taxation. Tripp v. Merchants' Mut. F. Ins. of business under a statute requiring the owner Co. 12 R. I. 435. of personal property to be assessed in the town The personal property belonging to a corhe inhabits. Portland v. Union Mut. L. Ins. poration, and not composing a part of its Co. 79 Me. 231, 9 Atl. 613.

capital stock which is otherwise provided for, The rule is that personal property, except as is liable to be taxed where the corporation has otherwise required, shall be listed and assessed its place of business, under a revenue law by for taxation in the county, town, or district which all personal property, except in certain where the owner resides, which in the case of enumerated and noninclusive cases, must be a domestic corporation is the place where its assessed to the owner in the town he inprincipal office or place of business is located. habits. Augusta Bank v. Augusta, 36 Me. 255; Minneapolis & N. Elevator Co. v. Clay County, | Portland, S. & P. R. Co. v. Saco, 60 Me. 196. 60 Mint. 522, 63 N. W. 101.

A corporation is an inhabitant only at its So far as concerns the taxation of personal domicil in its own state. A statute directing all property incapable of an actual situs separate personal property in or out of the state to be from the person or domicil of its owner, a cor- assessed to the owner in the city or town he poration must be considered to reside where inhabits does not warrant the assessment of a its principal office and works are located and foreign insurance company with a local office. its business is transacted. Pacific R. Co. v. Boston Invest. Co.. v. Boston, 158 Mass. 461, Cass County, 53 Mo. 17.

33 N. E. 580. The proposition is undoubtedly true that Taxes which are by law collectible only from where a corporation has its residence there residents of the districts in which they are its personal property is liable to assessment assessed are void when levied upon a corpoand taxation, if the law has prescribed no dif- ration whose principal place of business is out

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