Bullock v. Town of Guilford

The opinion of the court was delivered by Taft, J. The plaintiff claims that promissory notes due him, secured by mortgages upon real estate in Massachusetts, are not taxable in this State, for that such real estate is set in the list in that state and taxed to him, the taxes being paid by him through his agent residing in that state, in whose custody the mortgages and notes are kept. Upon these facts he insists that the property was situated and taxed in another state, and so free from taxation here under subdivision 3, sec. 270, R. L., which exempts from taxation ‘ ‘ personal estate owned by inhabitants of this State situated and taxed in another state.” Was this property situated in Massachusetts? The general rule is that a debt follows the person of its owner and has its situs at his domicile, although in some instances- it may, for the purposes of taxation, have a situs elsewhere, e. g., where it is held in trust, as in Catlin v. Hull, 21 Vt. 152. In such case it may well be claimed that the trustee becomes a quasi owner of the debt. A debt is simply an obligation of the debtor; it only possesses value in the hands of the creditor; with him it is property, and in his hands it may be taxed. A debt simply can have no locality separate from that of the party to whom it is due. State Tax on Foreign-held Bonds, 15 Wall. 300. The situs of a debt is not affected by the locality of the security ; it is still with the owner.' Taxing the security makes the debt no less a debt than it was before such taxation. We do not intend to say that the plaintiff can [520] not place bis property in mortgage notes in such a manner as to give them a situs elsewhere than at his domicile ; admitting that he may, we are clearly of opinion that in this case he has not done so. It is doubtful, in our view, whether the place of keeping the evidence of a debt can in any way affect the situs of the debt; and this is the only circumstance as to the situs which distinguishes this case from any ordinary case of a simple debt. We think that the situs of the debt in question was with the plaintiff in Guilford, and not in Massachusetts. Nor do we understand that the case of Caitlin v. Hull, supra, was controlled by the fact that the debtors resided in Vermont; the case was put upon the ground that Catlin held the property in trust as the agent of Hammond, and so was clearly within Act No. 9 of the Session Laws of 1844; and we think the decision should have been the same had the debtors resided without the State. Wherever the debtors resided, Catlin held the property here, and so was taxable. Holding that the property was not situated in Massachusetts renders it unnecessary to decide whether it was taxed there. We do not pass upon that question. It must be both situated and taxed there to exempt it here. If not situated there, it is taxable here. II. The plaintiff claims that the list in question was illegally made, because there was not so much due upon the mortgage notes as the sum at which the listers appraised their value. This case is unlike Howes v. Bassett, 56 Vt. 141, and Rowell v. Horton, 58 Vt. 1, where no property was known to the listers. Here the property was found in specie. Its existence was admitted, and the listers appraised the same. The statute requires the listers, in case the taxpayer omits to make a satisfactory inventory, “ to ascertain as best they can the amount of the taxable property of such person.” Would it do to say that any error in determining the amount due upon a note would invalidate the list ? It would be substantially impossible to administer the law under such a rigid rule. No claim is made that the listers acted in bad faith, or were wanting in [521] common care and skill. The existence of the mortgage notes for eighteen hundred dollars was known, and the evidence shows that when the plaintiff was interrogated as to them he stated he could not tell how much was due on them, nor how much had been paid on them. If the owner cannot tell the exact amount due, and'he testified upon trial that he could not, is it not absurd to require a stranger to do it? "We think, as was said in a similar case, Hartford v. Champion (Conn.) 3 New Eng. Rep. 543: “ The object of the taxpayer is to keep his property out of sight and from the knowledge of the assessors. By frankly stating what he owns, he avoids all danger of an unjust impression on the part of the assessors. If they get at the property thus concealed by using their best judgment in the matter, and by inquiries that bring them to ah honest belief on the subject, the taxpayer is, in the circumstances, in no position to make a reasonable complaint if they misjudge in the matter.” We cannot say, as matter of- law, that the listers erred in their appraisal, nor that the two mortgages appraised by them at eighteen hundred dollars were not of that value. The list was valid. Judgment reversed, and judgment for defendant. ■