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its and therefore not taxable, the court say-course of business, and deposited the proceeds
ing (page 765):
thereof in bank to the credit of his principal,
the sum thus deposited was subject to taxa-
tion. This is the language of the court aft
er its reference to the Clason Case, 46 La.
Ann. page 48, 14 So. 306:

"We are dealing exclusively with the question of credits as assessed, and we hold, as decided in Meyer v. Pleasant, 41 La. Ann. 645, 6 So. 258, Barber Asphalt Paving Co. v. New Orleans, 41 La. Ann. 1015, 6 So. "The case is different here. The foreign 794, 'that debts have their situs at the dom- corporation had an agent here, where it reicil of the creditor,' because debts are prop-ceived and where it sold fruit and received erty and have a value which is inseparable the price for the same. from the creditor, and because the state has were withheld in the hands of the agents for Part of the proceeds no greater power or jurisdiction to tax debts purposes incidental to the prosecution of due to nonresident creditors than it has to its business, and part deposited to the credit tax any other personal property of such non- of the company, subject to the check of its residents which is not situated in the state." local agent; also for the prosecution of its The same proposition was affirmed in the business here, and for such other purposes succeeding case, Railey v. Board of Assess as the company might direct it to be applied ors, 44 La. Ann. 765, 11 So. 93, the court, to. The company transacted business in[315] however, calling attention to this distinc-New Orleans precisely as did resident busition (page 770): ness men and firms. It received all the ad"There is no doubt of the legislative power vantages to be derived from the state and to modify the rule of comity, Mobilia per-city governments which residents received, sonam sequuntur, in many respects. Mov- and we see no reason why it should not be ables having an actual situs in the state may taxed, as claimed in this proceeding, unless be taxed there, though the owner be domi- there be insuperable legal objections in the ciled elsewhere. Even debts may assume way. We find a statute of the state, which such concrete form in the evidences thereof by its terms brings them under the operation that they may be similarly subjected when of state and city taxation, and we are bound such evidences are situated in the state, as to give effect to its provisions unless they be in the case of bank notes, public securities, in derogation of the Constitution. The unand, possibly, of negotiable promissory constitutionality of the act is not pleaded, notes, bills of exchange, or bonds. and we, of ourselves, see no unconstitutional "But as to mere ordinary debts, reduced features in it. The rule Mobilia sequuntur 314]to no such concrete *forms, they are not ca-personam is a fiction of the law, not resting pable of acquiring any situs distinct from of itself upon any constitutional foundation, the domicil of the creditor, and no legislative and which gives way before express laws, depower exists to change that situs so far as stroying it in any given case where constitu nonresident creditors are concerned. As tional requirements themselves do not stand said by the Supreme Court of the United in the way." States: 'To call debts property of the debtors is simply to misuse terms. All the property there can be in the nature of things, in debts, belongs to the creditors to whom they are payable, and follows their domicil with the conceded extent of the taxing power, "The revenue act, in entire accordance wherever that may be. Their debts can taxes the movable property of the foreigner. have no locality separate from the parties We cannot hold that cash thus liable to taxto whom they are due.' State Tax on For-ation is exempted because for convenience it eign-held Bonds, 15 Wall. 300, sub nom. is deposited in bank and checked on by the Cleveland, P. & A. R. Co. v. Pennsylvania, 21 L. ed. 179."

This was reaffirmed in Parker v. Strauss, 49 La. Ann. 1173, 22 So. 329, in which the court says (page 1175):

The last case to which our attention has

owner. It would be a strain to apply to the In Clason v. New Orleans, 46 La. Ann. 1, accorded to debts in their ordinary signisdeposited cash the exemption from taxation 14 So. 306, the court affirmed the same prop-cance, due to the foreign creditor." osition in respect to a deposit in a bank to the credit of the nonresident, saying: "We cannot distinguish between the debt due to the plaintiffs by a bank as arising from a deposit to the credit of the firm in money, and that due to it from any other cause."

This decision was, however, qualified in Bluefields Banana Co. v. New Orleans Bd. of Assessors, 49 La. Ann. 43, 21 So. 627, the court there saying that the decision rested upon the special facts of that case; that there was really no general deposit, but that the local bank was simply a medium through which the funds of the nonresident kept at the place of his residence were drawn against for the purpose of making payments in Louisiana, and in this latter case it was held that, where a nonresident had an agent in New Orleans who disposed of the property of his principal as it was forwarded in the 178

been called is that of Liverpool & L. & G. Ins.
Co. v. Board of Assessors, 51 La. Ann. 1028,
25 So. 970. In that case the court reaffirmed

its prior rulings that "a debt due to a non-
resident (still in nonconcrete form) has its
situs at the domicil of the creditor, and not
at the domicil of the debtor," and therefore
is not subject to taxation by the state which
is the latter's domicil. At the same time it
observed, in its discussion of the question,
that the law requiring debts to be assessed
for taxation "was intended for all such debts
as are evidenced by note or by mortgage, or
that are in such other concrete form as to
render it possible to subject them to taxation
under the present laws.
been made since the cited decisions were[310]
No attempt has
rendered to localize 'debts' or 'open accounts"

such as those upon which the taxes are now | chattels, good by the law of his own domicil, claimed."

will be good elsewhere. But this rule is From this review of the decisions of the merely a legal fiction, adopted from considsupreme court of the state it is obvious that erations of general convenience and policy, moneys, such as these referred to, collected for the benefit of commerce and to enable as interest and principal of notes, mortgages, persons to dispose of their property, at their and other securities kept within the state decease, agreeably to their wishes, without and deposited in one of the banks of the their being embarrassed by their want of state for use or reinvestment, are taxable un-knowledge in relation to the laws of the counder the act of 1890. They are property aris try where the same is situated. But even ing from business done in the state; they this doctrine is to be received and understood were tangible property when received by with this limitation, that there is no positive the agent of the plaintiffs, and, as such, sub-law of the country where the property is in ject to taxation, and their taxability was act, which contravenes the law of his domnot, as the court holds, lost by their mere de-icil; for if there is, the law of the owner's posit in a bank. It is true that when de- domicil must yield to the law of the state posited the moneys became the property of where the property is in fact situate.” the bank, and for most purposes the relation of debtor and creditor arose between the bank and the depositor, yet as evidently the moneys were to be kept in the state for reinvestment or other use they remained still subject to taxation, according to the decision in 49 La. Ann. 43. With regard to the notes and mortgages, it may be conceded that there is no express decision of the supreme court to the effect that they were taxable under the law of 1890, yet the reasoning of that court in several cases and its declarations, although perhaps only dicta, show that clearly in its judgment they had a local situs within the state, and were by the statute of 1890 subject to taxation.

When the question is whether property is exempt from taxation, and that exemption depends alone on a true construction of a statute of the state, the Federal courts should be slow to declare an exemption in advance of any decision by the courts of the state. The rule in such a case is that the Federal courts follow the construction placed upon the statute by the state courts, and in advance of such construction they should not declare property beyond the scope of the statute and exempt from taxation unless it is clear that such is the fact. In other words, they should not release any property within the state from its liability to state taxation unless it is obvious that the statutes of the state warrant such exemption, or unless the mandates of the Federal Constitution compel it. [317] *If we look to the decisions of other states we find the frequent ruling that when an indebtedness has taken a concrete form and become evidenced by note, bill, mortgage, or other written instrument, and that written instrument evidencing the indebtedness is left within the state in the hands of an agent of the nonresident owner, to be by him used for the purposes of collection and deposit or reinvestment within the state, its taxable situs is in the state. See Catlin v. Hull, 21 Vt. 152, in which the rule was thus announced (pages 159, 161):

"It is undoubtedly true that, by the generally acknowledged principles of public law, personal chattels follow the person of the owner, and that, upon his death, they are to be distributed according to the law of his domicil; and, in general, any conveyance of

.

"We are not only satisfied that this method
of taxation is well founded in principle and
upon authority, but we think it entirely just
and equitable, that, if persons residing
abroad bring their property and invest it in
this state, for the purpose of deriving profit
from its use and employment here, and thus
avail themselves of the benefits and advan-
tages of our laws for the protection of their
property, their property should yield its due
proportion towards the support of the gov
ernment which thus protects it."

In Goldgart v. People ex rel. Goar, 106
III. 25, 28, the court said:

*"If the owner is absent, but the credit-[318)
are in fact here, in the hands of an agent. for
renewal of collection, with the view of reloan-
ing the money by the agent as a permanent
business, they have a situs here for the pur-
pose of taxation, and there is jurisdiction
over the thing."

In Wilcox v. Ellis, 14 Kan. 588, 19 Am. Rep. 107, the power of the state to tax a citizen and resident of Kansas, on money due him in Illinois, evidenced by a note, which was left in Illinois for collection, was denied, the court saying (603), after referring to the maxim Mobilia sequuntur personam:

"This maxim is at most only a legal fiction; and Blackstone, speaking of legal fictions, says, 'This maxim is invariably ob served, that no fiction shall extend to work an injury, its proper operation being to prevent a mischief or remedy an inconvenience that might result from the general rule of law.' 3 Bl. Com. 43. Now as the state of Illinois, and not Kansas, must furnish the plaintiff with all the remedies that he may have for the enforcement of all his rights connected with said notes, debts, etc., it would seem more just, if said debt is to be taxed at all, that the state of Illinois, and not Kansas, should tax it. and that we should not resort to legal fictions to give the state of Kansas the right to tax it."

The same doctrine was affirmed in Fisher v. Rush County Comrs. 19 Kan. 414, and again in Blain v. Irby, 25 Kan. 499, 501, in which the court said, referring to promissory notes: "They have such an independent situs that they may be taxed where they are situated."

The decisions of the highest courts of New

York, in which state these plaintiffs reside, are to the same effect. In People ex rel. Westbrook v. Ogdensburgh, 48 N. Y. 390, 397,

the court said:

which is outside those limits, and therefore that bonds issued by a railroad company, although secured by a mortgage on property *within the state, were not subject to taxa-[3201 "That the furniture in the mansion and tion while in the possession of their owners the money in the bank were, under these who were nonresidents, the court saying: provisions, properly assessable to the relat-"We are clear that the tax cannot be sus ors is not seriously disputed. And I am un-tained; that the bonds, being held by nonable to see why the money due upon the land residents of the state, are only property in contracts must not be assessed in the same their hands, and that they are thus beyond way. The debts due upon these contracts the jurisdiction of the taxing power of the are personal estate, the same as if they were state." But in the same case, on page 323, due upon notes or bonds; and such personal L. ed. 188, the court declared: "It is un estate may be said to exist where the obliga-doubtedly true that the actual situs of pertions for payment are held. Notes, bonds, sonal property which has a visible and tan[19]and other contracts for the payment of gible existence, and not the domicil of its money have always been regarded and treat-owner, will, in many cases, determine the ed in the law as personal property. They state in which it may be taxed. The same represent the debts secured by them. They thing is true of public securities consisting are the subject of larceny, and a transfer of of state bonds and bonds of municipal bodies, them transfers the debt. If this kind of and circulating notes of banking instituproperty does not exist where the obligation tions; the former, by general usage, have acis held, where does it exist? It certainly quired the character of, and are treated as, does not exist where the debtor may be, and property in the place where they are found, follow his person. And while, for some pur- though removed from the domicil of the poses in the law, by legal fiction, it follows owner; the latter are treated and pass as the person of the creditor and exists where money wherever they are. But other perhe may be, yet it has been settled that for sonal property, consisting of bonds, mortthe purpose of taxation this legal fiction gages, and debts generally, has no situs indoes not, to the full extent, apply, and that dependent of the domicil of the owner, and such property belonging to a nonresident certainly can have none where the instru creditor may be taxed in the place where the ments, as in the present case, constituting obligations are held by his agent. People the evidences of debt, are not separated from ex rel. Hoyt v. Commissioners of Taxes, 23 the possession of the owners." N. Y. 238; People ex rel. Jefferson v. Gardner, 51 Barb. 352; Catlin v. Hull, 21 Vt. 152."

This proposition was reaffirmed in People ex rel. Jefferson v. Smith, 88 N. Y. 576, in which the court of appeals of that state held that a resident of New York was not liable to taxation on moneys loaned in the states of Wisconsin and Minnesota on notes and mortgages, which notes and mortgages were held in those states for collection of principal and interest and reinvestment of the funds, it appearing that property so situated within the limits of those states was there subject to taxation. See also State v. St. Louis County Ct. 47 Mo. 594, 600; People v. Home Ins. Co. 29 Cal. 533; Billinghurst v. Spink County, 5 S. D. 84, 98, 58 N. W. 272; Re Jefferson, 35 Minn. 215, 28 N. W. 256; Poppleton v. Yamhill County, 18 Or. 377, 7 L. R. A. 449, 23 Pac. 253; Redmond v. Rutherford Comrs. 87 N. C. 122; Finch v. York County, 19 Neb. 50, 56 Am. Rep.

741.

With reference to the decisions of this court it may be said that there has never been any denial of the power of a state to tax securities situated as these are, while there have been frequent recognitions of its power to separate for purposes of taxation the situs of personal property from the domicil of the owner. In State Tax on Foreignheld Bonds, 15 Wall. 300, sub nom. Cleve land, P. & A. R. Co. v. Pennsylvania, 21 L. ed. 179, it was held that while the taxing power of the state may extend to property within its territorial limits, it cannot to that

This last sentence, properly construed, is not to be taken as a denial of the power of the legislature to establish an independent situs for bonds and mortgages when those properties are not in the possession of the owner, but simply that the fiction of law, so often referred to, declares their situs to be that of the domicil of the owner, a declaration which the legislature has no power to disturb when in fact they are in his possession. It was held in that case that a statute requiring the railroad company, the obligor in such bonds, to pay the state tax, and authorizing it to deduct the amount of such taxation from the interest due by the terms of the bond, was as to nonresidents a law impairing the obligation of contracts. The same proposition was affirmed in Murray v. Charleston, 96 U. S. 432, 24 L. ed. 760, where the city of Charleston attempted to tax its obligations held by nonresidents of the state. In Tappan v. Merchants' Nat. Bank, 19 Wall. 490, 22 L. ed. 189, the ruling was that although shares of stock in national banks were in a certain sense intangible and in-[321] corporeal personal property, the law might separate them from the persons of their owners for purposes of taxation, and give them See also Pullman's a situs of their own. Palace Car Company v. Pennsylvania, 141 U. S. 18, 22, 35 L. ed. 613, 617, 11 Sup. Ct. Rep. 876, where the question of the separation of personal property from the person of the owner for purposes of taxation was discussed at length. As also the case of Savings & Loun Soc. v. Multnomah County, 169 U. S. 421, 427, 42 L. ed. 803, 905, 18 Sup. Ct.

The same doctrine was reaffirmed in Stock-
ton v. Stanbrough, 3 La. Ann. 390. Now
if property can have such a situs within the
state as to be subject to seizure and sale on
execution, it would seem to follow that the
state has power to establish a like situs
within the state for purposes of taxation.
It has also been held that a note may be

a replevin suit. Graff v. Shannon, 7 Iowa,
508; Smith v. Eals, 81 Iowa, 235, 46 N. W.
1110; Pritchard v. Norwood, 155 Mass. 539,
30 N. E. 80.

Rep. 892, in which a statute of Oregon tax-in controversy, and consequently his subseing the interest of a mortgagee in real estate quent adjudication of it conferred no title on was adjudged valid, although the owner of Bailey." the mortgage was a nonresident. Nor is there anything in the case of Kirtland v. Hotchkiss, 100 U. S. 491, 25 L. ed. 558, conflicting with these decisions. It was there held that a state might tax one of its citizens on bonds belonging to him, although such bonds were secured by mortgage on real estate situated in another state. It was assumed that the situs of such intangible prop-made the subject of seizure and delivery in erty as a debt evidenced by bond was at the domicil of the owner. There was no legislation attempting to set aside that ordinary rule in respect to the matter of situs. On the contrary, the legislature of the state of Connecticut, from which the case came, plainly reaffirmed the rule, and the court in its opinion summed up the case in these words (p. 499, L. ed. 562): "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 under 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 rightfully interfere."

This matter of situs may be regarded in another aspect. In the absence of statute, bills and notes are treated as choses in action and are not subject to levy and sale on execution, but by the statutes of many states they are made so subject to seizure and sale, as

It is well settled that bank bills and municipal bonds are in such a concrete tangible form that they are subject to taxation where found, irrespective of the domicil of the owner; are subject to levy and sale on execution, and to seizure and delivery under replevin; and yet they are but promises to pay-evidences of existing indebtedness. Notes and mortgages are of the same nature; and while they may not have become so generally recognized as tangible personal property, yet they have such a concrete form that[323] we see no reason why a state may not declare that if found within its limits they shall be subject to taxation.

It follows from these considerations that the decree of the Circuit Court must be reversed, and the case remanded for further proceedings.

Mr. Justice Harlan and Mr. Justice White dissented.

Piff. in Err.,

บ.

ROBERT T. CONROY, Admr.

(See S. C. Reporter's ed. 323-347.)

any tangible personal property. 1 Free- NEW ENGLAND RAILROAD COMPANY, man, Executions, § 112; 4 Am. & Eng. Enc. Law, 2d ed. 282; 11 Am. & Eng. Enc. Law, 2d ed. 623. Among the states referred to in these authorities as having statutes warrant[822]ing such levy and sale are California, Indiana, Kentucky, New York, Tennessee, Iowa, and Louisiana. Brown Anderson, 4 Mart. N. S. 416, affirmed the rightfulness of such a levy and sale. In Fluker v. Bullard, 2 La. Ann. 338, it was held that if a note was not taken into the actual possession of the sheriff a sale by him on an execution conveyed no title to the purchaser, the court saying:

V.

Liability for negligence of fellow servantconductor as fellow servant of brakeman. the conductor of a freight train is not a vice principal, unless special and unusual powers have been conferred upon him, but is a fellow servant of the engineer and brakemen, within the meaning of the rule which exempts the railroad company, their common employer, from liability to one of them for injuries caused by the negligence of another.

[No. 42.]

"In the case of Simpson v. Allain it was held that, in order to make a valid seizure of tangible property, it is necessary that the sheriff should take the property levied upon into actual possession. 7 Rob. (La.) Argued April 3, 4, 1899.

504. In the case of Goubeau v. New Orleans & N. R. Co. the same doctrine is still

more distinctly announced. The court there

says:

N

4, 1899.

Decided December

A CERTIFICATE from the United States Circuit Court of Appeals for the 'From all the different provisions of First Circuit for answer to questions as to our laws above referred to can it be contro- whether a conductor was (1) a fellow servverted that, in order to have them carriedant of a brakeman, or (2) whether he was a into effect, the sheriff must necessarily take vice principal, for whose negligence his emthe property seized into his possession? ployer is responsible. First question an

This is the essence of the seizure. It cannot exist without such possession.' 6 Rob. (La.) 348. It is clear, under these authorities. that the sheriff effected no seizure of the note

NOTE. As to when a conductor is deemed to be a coservant of other railway employees,~ see Jackson v. Norfolk & W. R. Co. (W. Va.) 46 L, R. A. 337, and note.

swered in the affirmative. The second in the night was cold and clear. The accident was
negative.
near midnight.

Statement by Mr. Justice Shiras: [324] *This was an action against a railroad corporation by a brakeman in its employ to recover damages for a personal injury caused by the negligence of the conductor of one of its trains.

The facts in this case, as stated in the certificate of une cireuit court of appeals, were as follows:

"The negligence complained of consisted in the alleged failure of the conductor in control of the men and in charge of the train, in view of the character of the night, the character of the road in respect to grades and curves, the speed at which the train was run, and the liability of the train to part asunder at that place, to properly watch and supervise its movements, and the fact that he, in the full knowledge that the rear and middle brakemen were in the caboose, away from their brakes, permitted them to remain there, and failed to order them to the brakes."

If you find in this particular case, from the evidence in the case and such comnon knowledge as jurymen are entitled to use, that by the rules of this road the conductor gave directions to the people who worked on the train, gave directions to start the train, gave directions to stop the train, gave directions as to the location and position of the different men on the train, and also had the general management of the train and control over it when running be

"On the 15th day of December, 1894, a freight train of the defendant company, drawn by a steam locomotive, and carrying an engineer, a fireman, three brakemen, and a conductor, set out from Worcester, in the The jury were instructed: "The conduccommonwealth of Massachusetts, for the city tor of the train, under the rules laid down by of Providence, in the state of Rhode Island. the rules of the Supreme Court of the United The train, which consisted of the locomotive States, is in a peculiar and special condition. and tender, thirteen or fourteen freight The conductor of the train, as I understand cars, and a caboose car, was heavily the theory of the rule of the Supreme Court loaded with freight. The train left Worces- of the United States, is, in a certain sense, ter at about 7.15 P. M. and proceeded between stations, at least, is in a certain on its way without accident, until when, sense like the master of a ship on a voyage; at a point on the railroad in the state he is beyond the reach of orders when runof Rhode Island, away from telegraphic ning his train between stations; and therecommunication and not at a station, and dis- fore as a matter of necessity, as a matter of[326] tant from Providence about 16 miles, the en- public policy, I suppose, he must be held to gineer discovered by the motion and behavior stand in the place of the corporation itself. of the locomotive that the train had broken apart. He immediately gave signals with the whistle to indicate to the trainmen upon the rear portion of the train that it was broken off, and continued to repeat those signals, which consisted of three rapid blasts of the whistle with very brief intervals between the different threes, while the locomotive and the one car which remained connected ran 3/4 of a mile. The locomotive with the connected car ran about 24 miles when the engineer, not being able to see any-tween stations, then I say to you, gentlemen, thing of the separated part of the train, and supposing that his signals had been heard and its advance stopped, slowed up the engine preparatory to sending the fireman back with the lantern and to take steps for restoring the connection of the parts of the train. Before speed had been so reduced that the fireman could alight from the train, the rear portion was discovered close at hand and approaching at great speed. The fireman gave notice of this fact and a signal for the locomotive to go ahead, but before it could gain speed to get away a collision between the two parts of the train took place, and one Gregory, a brakeman, who was on the top of the car still attached to the engine, was thrown trom the car by the shock and instantly killed.

that he for this case represents the company,
and if injuries resulted from his negligent
acts the company is responsible."

The jury returned a verdict for the plain-
tiff, and assessed damages in the sum of $4,-
250.

The defendant brought the case by writ of error to the United States circuit court of appeals for the first circuit.

And, upon consideration of the case, after full argument, the judges of that court de sired the instructions of the Supreme Court upon the following questions of law arising

on the facts as before stated:

ductor was the negligence of a fellow servant
1st. Whether the negligence of the con-

of the deceased brakeman?

2d. Whether the negligence of the conduc-
tor was the negligence of its vice or substi-
the corporation is responsible?
tuted principal or representative, for which

Mr. Frank A. Farnham argued the cause
and filed a brief for plaintiff in error:

"The three brakemen on the train were a head, a middle, and a rear brakeman. Gregory was the head brakeman, and at once, on discovery of the separation of the train, went to the top of the only car left with the engine. The conductor and the middle and rear brakemen had been riding in the caboose Where a business becomes so vast and car at the rear end of the train, anu did not diversified that it necessarily separates into hear the warning signals which the engineer departments of service, the individuals gave with the whistle, nor know that the placed in charge of these departments and train had broken until the collision, but re-given entire management and control therein mained all the time in the caboose. The are practically considered, as to their sub

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