Baars v. City of Grand Rapids , 129 Mich. 572 ( 1902 )

Grant, J.

(after stating the facts). If the choses in action in this case, owned by Miss Wood, standing in her name, consisting of credits secured by her mortgages, are taxable in this State, it must follow that the law taxes all credits, if the foreign owners thereof employ agents here to look after their investments.

It is unnecessary to cite authorities to sustain the following rules in regard to the taxation of property:

1. Real estate is taxable where situated, regardless of the residence of the owner.

2. Personal property, in the absence of a statute, is taxable at the domicile of the owner.

3. Tangible personal property may, by statute law, be assessed at the place of its actual fixed location.

Courts are divided upon the power of a State to tax choses in action owned by nonresidents.

This court held in Graham v. Township of St. Joseph, 67 Mich. 652 (35 N. W. 808), that the authority to tax personal property of a tangible character at any other place than the residence of the owner must be plainly written in the statute. If that be the rule in regard to tangible personal property, with much greater force does the rule apply to intangible property. The power of taxing this property in the hands of nonresidents must therefore, if it exists, clearly be found in the statute. It is not contended that the statute expressly authorizes such taxation. By the statute (1 Comp. Laws, § 3836) “all personal property, except as hereinafter provided, shall be assessed to the owner in the township in which he is an inhabitant.” The exceptions are found in section 3837, which provides that all goods and chattels shall be assessed in the township where situate, if certain conditions exist. And subdivision 6 of the same section provides that “all personal property under the control of a trustee or agent * * * may be assessed to such trustee or agent in the township where he resides.” The only provision of the statute which, by any possibility, can be construed into authority to impose this tax, is the last provision above quoted. The authority to so tax is not “plainly written in the statute.” We, however, disposed of this question in the case of Village of Howell v. Gordon, 127 Mich. 517(86 N. W. 1042), which case in its facts is almost the parallel of this. Plaintiff here had the same control over the loans and moneys of his client, Miss Wood, as did defendant Gordon. Each had exercised the same control for many years. To hold with the defendant in this case would be to overrule that case. The taxability of this property cannot be made to depend upon the fact that nonresidents have agents here to attend to their business. Investments of nonresidents are usually made and controlled in this way. It cannot well be done in any other way. The title to these credits was not in the agent, but in the principal. It is not logical to say that taxability depends upon the length of time that the money or the note has been in the.hands of the agent for collection or for investment, or the number of times he has collected and reinvested, or the number of times he has collected interest. In City of Detroit v. Lewis, 109 Mich. 155 (66 N. W. 958, 32 L. R. A. 439), the legal title was in the trustee, and we there clearly recognized the distinction between cases where the legal title was in the nonresident and where it was in the agent or trustee. We think that case points out the true distinction, and that the title must be in the trustee or agent in order to subject the property to taxation. It does not mean that control which an agent has who is clothed merely with authority to loan his principal’s money under his direction, and take the title in the name of his principal. See, also, City of St. Paul v. Merritt, 7 Minn. 258.

Judgment reversed, and new trial ordered.

Hooker, C. J., Moore and Montgomery, JJ., concurred. Long, J., did not sit.