Hamilton Court of Insolvency. where a promise made or taken as the instrument of fraud, and the basis of relief on the ground of fraud. The petition, as the affidavit under which the second attachment was issued, however, does set out facts to show that the representations were false as to the purpose for which the money was obtained, and that the plaintiff was deceived thereby. The notes of the plaintiff were discounted on the same day and the proceeds applied to the extinguishment of the debt occasioned by the shortage of the treasurer, and not applied to meet the pressing demands on the company, and thus became an account of the Louis Snider Paper Company. The falsity consisted not only in the concealment, but also in the direct statement of the purpose for which the money was obtained. The case is not without some doubt, but after a reviewal of the authorities and a careful examination of the record, the court is of the opinion that the atachment should be sustained on the ground that the debt was fraudulently contracted, for which the suit has been brought, as provided in paragraph nine section 5521, Revised Statutes. The motion to discharge the attachment is overruled. SMITH and JACKSON, JJ., concurred. Outcalt & Granger, for the Motion. E. P. Bradstreet, W. P. Biddle and H. D. Peck, Contra. TAXES AND TAXATION. [Hamilton Court of Insolvency, July, 1897. IN RE ASSIGNMENT OF THE JACKSON Brewing Co. TAXES ON PROPERTY IN HANDS OF AN ASSIGNEE for Benefit of CrEDITORS. Taxes can not be levied on personal property which has passed into the hands of an assignee for the benefit of creditors; and this rule applies where the business of the assignor is being continued by the assignee. The Jackson Brewing Company made an assignment for the benefit of its creditors on March 3, 1894, to John B. Bobe, and on March 7, 1894, an order was made by the court directing the assignee to continue the business, and afterward with the consent of three-fourths in number and amount of the creditors an order was made directing the assignee to continue the business, which order has been continued in force ever since, and under said order of the court, the assignee still continues to carry on said business. The auditor of Hamilton county has assessed the personal estate in the possession of said John B. Bobe, as such assignee, for taxes as follows: For 1894, on $30,970, taxes amounting to........ For 1896, on $23,500, taxes amounting to Total taxes.... $964 79 725 25 682 44 $2,372 48 An application has been made by the treasurer of Hamilton county for an order requiring the assignee to pay these taxes, which is resisted by the assignee. It will be observed that the assignment was made in 1894, prior to the day preceding the second Monday of April, as of which date all personal property is by statute required to be returned for taxation. In the case of McNeill, Assignee, v. Hagerty, Auditor, 51 O. S., 255, our supreme court had under consideration the question as to the right to assess personal property in the possession of an assignee for the benefit of creditors for In re assignment of Jackson Brewing Co. taxation. Judge Spear, in delivering the opinion of the court, says: "The effect of the assignment is to devote the property absolutely to the satisfaction of the debts of the assignor, just as they existed at the time of the assignment, subject, necessarily, to be depleted by the expenses of the trust. "The assignee has no power to create any new lien, nor to divert the property from the purpose contemplated by law. "Provision is made for the payment by the assignee of preferred liens upon the property, if any exist, and for the payment of taxes in preference to any other claim against the assignor. The language in this regard is significant. 'All taxes of every description assessed against the assignor upon any personal property held by him before his assignment, shall be paid by the assignee or trustee out of the proceeds of the property assigned in preference to any other claims against the assignor.' Nowhere is it in terms provided that the assignee shall list the property for taxation, nor is provision made for the payment of any taxes save those existing against the assignor. The omission seems to us significant when contrasted with the duty enjoined by other sections of the statute upon other trustees. By section 2734 returns must be made of the property of every ward by his guardian, of every estate of a deceased person by his executor or administrator, of corporations whose assets are in the hands of receivers by such receivers. It is made the duty of every executor or administrator' to apply the assets to the payment of debts in the following order: *** Fourth, public rates and taxes, and sums due the state for duties on sales at auction." For such payment of taxes the administrator or executor is allowed in the settlement of his accounts. The provision relating to the payment of taxes by assignees is that all taxes of every description assessed against the assignor upon any personal property held by him before his assignment shall be paid by the assignee,' etc,; and if we apply the familiar rule, expressio unius exclusio alterius, it would seem that those are the only taxes payment of which may properly be included in his accounts." ་ Our supreme court has thus declared that there is no provision in our statutes authorizing the levying of taxes on personal property in the hands of an assignee for the benefit of creditors. No provision has been made in our statutes for taxing such property where the assignee is carrying on the business under order of court. Therefore, there being no authority in law to levy these taxes on the personal property of the Jackson Brewing Company in the hands of the assignee, the application of the treasurer of Hamilton county for an order to require the assignee to pay the taxes levied will be refused. Rendigs, Foraker & Dinsmore, for the County Treasurer Kramer & Kramer, Kittredge & Wilby and Ramsey, Maxwell & Ramsey, Contra. Hamilton Probate Court. COLLATERAL INHERITANCE TAX. [Hamilton Probate Court, June, 1897.] IN RE ESTATE OF ELIZABETH L. SPEERS. PROPERTY SUBJECT TO THe Collateral INHERITANCE TAX. Personalty as well as realty located in Ohio, and passing by will, is subject to the collateral inheritance tax of this state without regard to the residence of the decedent to whom it belonged. FERRIS, J. An application has been filed with this court, in which it is represented that one Elizabeth L. Speers died testate, a resident of Kentucky, devising by her will her entire estate to various persons in several amounts; that about ninety thousand dollars worth of real estate belonging to said decedent, was located in this county, and that a personal estate of about eighty thousand dollars, represented by bonds, notes, mortgages and money on deposit in banks of the city of Cincinnati, was, by the will, directed to be paid to persons who could not have received the same except for the terms of the will. The question that is presented by the application does not relate to the real estate, it being admitted by counsel that the lex loci rei sitae governs. But contention is had as to the personal property located within the the jurisdiction of this court at the time of the decease of the testatrix. On behalf of the state, it is urged by the prosecuting attorney, that, under the provision of section one of the collateral inheritance tax law, "all property within the jurisdiction of this state, and any interests therein, whether belonging to inhabitants of this state or not, and whether tangible or intangible, which shall pass by will or by the intestate laws of this state, *** shall be liable to a tax;" that this personal property is subject to the provisions of the collateral inheritance tax law, and therefore, the court should order such proceedings as will direct the executors to pay into the county treasury, after proper deductions, a five per cent. tax upon all of the personal property within its jurisdiction. On behalf of the executors, resistance is made to the application on the theory that Elizabeth L. Speers, having been continuously a bona fide resident of the state of Kentucky, where her will was executed and admitted to probate, all her personal property "had a legal situs" for all tax purposes, in Kentucky; that no part of her personalty passed to any collateral taker under, or by virtue of any of the laws of the state of Ohio, and, as collateral inheritance tax is laid upon the succession and not upon the property, there is no consideration moving from the state of Ohio to support the tax; that the bonds, stocks, notes and evidences of debt in the private box of Mrs. Speers, in the vault of the Safe Deposit Company, in Cincinnati, for safe keeping, did not give any of these values a situs for taxation other than that of the owner, and that the credit in bank was of such a character as to be incapable of a legal situs, apart from the person of the Citing Orcutt's Appeal, 97 Pa. St., 179; Kintzing v. Hutchinson and Sharpless (U. S. circuit court, dist. N. J.), 34 Legal Intelligencer; Matter of Enston, 113 N. Y., 174; 15 Wallace, 300; Kir bland v. Hotchkiss, 100 U. S., 491. owner. Counsel for the executors have argued to the court, that in matters of this character, the tax is not assessed upon the property itself, but that the property is used as a basis for estimating the value of the succession; that property can have but one legal situs, and the deviation from the rule which has prevailed for a great many years as to the situs of property, would involve the different states in constant conflict, which would be the means of imposing heavy and unnecessary burdens upon citizens; that the residence of the owner is a fact easily determined, and a wise guide for the laying of taxes, and that the law mobilia sequenter personam is one applicable to the case at bar. In re estate of Elizabeth L. Speers. Many complicated questions have arisen under laws affecting the liability for the payment of collateral inheritance tax, or a legacy tax,-where the testator or testatrix were either non-residents or aliens, and it is by no means, at this time, a well-settled conclusion upon which the authorities have united; but, the trend of opinion is manifestly along a line which finds at its basis the right of a stateto impose tax upon tangible property within its borders irrespective of all questions of residence or the allegiance of the owner. Cooley on Taxation, 2d Ed., pages 55 and 56. The application of this doctrine to the collateral inheritance, is not made peculiarly dependent upon a single circumstance, but where it appears that the property or the person, or both, shall be within the boundaries of the state, jurisdiction is conferred. Our supreme court, in passing upon the constitutionality of the present act has left no room for investigation by this court, at this time, for authority on the part of the state to impose such a tax upon its citizens, and the reasoning of courts having a similar law, has, in my judgment, cleared the legal atmosphere as to all rights relating to non-residents. The case of The State v. Dalrymple, 70 Md., 294, a leading case on the subject, furnishes a strong line of reasoning that will aid in the proper solution of the questions at bar. The justice deciding the matter said: "No reason has beer assigned, or can be suggested why the broad language of the statute and the evident design of the legislature should be so narrowed and restricted as to exempt from this tax the property of a non-resident actually here, notwithstanding that some property may, for other purposes, be treated as constructively elsewhere. If we adopt the view insisted on by the appellees, it would result in a discrimination in favor of the non-resident, and against our own citizens; a discrimination, too, which the legislature certainly never intended to make, and for which no warrant whatever, can be found in the plain letter of the statute. In permitting property within the state, upon the death of its owner, to pass by devise or descent or distribution, the legislature has seen fit, where strangers or collateral kindred receive it, to exact, as the condition upon which that privilege is granted, the tax in question. The imposition and collection of the tax cannot, therefore, depend upon the mere accidental residence of the owner. Dos Passos, at page 98, in his treatise on legacy and succession taxes, says, that upon grounds of public policy, the taxing state ought not to discriminate against its own citizens in favor of non-residents; that in some states, by express enactment, both tangible and intangible property within the state has been held liable to this tax, and so, under general tax laws, taxes have been imposed where such tangible property, such as bonds, stocks, mortgages and other choses in action, were actually within the taxing state at the time of the death, in the hands of an administrator or executor with ancillary letters, or where such property was in the hands. of a mere agent for collection. This is directly contrary to the position taken by the Pennsylvania courts in a case referred to by counsel for the executors in Orcutt's Appeal. In that case relied upon by counsel, an examination should be had of the statute then existing in the state of Pennsylvania, and a comparison made with the act under which this application is made. The court deciding the Pennsylvania case said: "By the very words of the act, the tax is not only limited to such estates as have a situs within the commonwealth, and also pass to collateral heirs or legatees but it is further restricted in defining the mode in which they shall pass, namely, estates being within this commonwealth and passing from any person either by will or under the intestate laws thereof. It is therefore, clear that estates, not passing by will that is operative within the state or under the intestate laws thereof, are not within the purview of the court. Devolution, either under the intestate laws of the commonwealth, or under a properly executed will, is clearly made a condition of liability Hamilton Probate Court. to the tax. So that that court has been thoroughly consistent in holding, in a number of recent decisions, that all government bonds, mortgages upon real es tate in the state, held as collateral to bonds owned by a decedent domiciled in another state, are exempt from taxation in that state. But the latter cases follow closely the line of reasoning adopted by the dissenting judge in The Matter of Enston, found in 113 N. Y., at page 183. The gist of that decision is found in the answer of the court to the appellant's contention, that as to personal securities, the residuum, after the payment of debts and other charges, should alone be assessed, and that the court of the decedent's domicile is the only one that can properly determine how much of them will go to collateral beneficiaries; for the court says, that the property chargeable with the tax, is defined with such clearness as to deprive the appellant's contention of all force. In the first place, it is all property which shall pass. Second, the method of value is determined. Third, the time of payment. Fourth, the power of executors to sell to pay the same. And there the provisions of the lew set forth "After the passage of this act, all property which shall pass by will or by the intestate laws of this state, from any person who may die seized or possessed of the same, while a resident of this state (New York), or if such decedent was not a resident of this state at the time of his death, which property or any part thereof shall be within the state;" while under the Ohio law, volume 91, act of 1894, page 169, amended act, section 1, it is provided that all property within the jurisdiction of this state, and any interest therein, whether belonging to inhabitants of this state or not, and whether tangible or intangible, which shall pass by will or by the intestate laws of this state, shall be liable to a tax of five per cent. upon its value. Now, therefore, it must appear, as was made manifest by the reasoning of Danforth, J., that however the Pennsylvania statute may read, certain it is that the Ohio law plainly indicates that whether the decedent were a resident or a non-resident, was an immaterial matter; residence not being the primary consideration to be had in view in the enforcing of the law. The property was to be subject to the tax, irrespective of all questions of residence. Therefore, in the opinion of the court, the application asking for a direction to the executors to return this property for taxation should be granted and such proceedings will be had in accordance therewith. Coppock, Hammel & Coppock, for the Estate. |