648 POPULAR SCIENCE MONTHLY. 



PKINCIPLES OF TAXATION. 



By DAVID A. WELLS, LL.D., D.C.L., 



CORRESPONDANT DE L'lNSTITUT DE FRANCE, ETC. 



XVI. TAXATION OF CHOSES IN ACTION. 



IN addition to the review of the celebrated Foreign-held Bond 

 Case (see Popular Science Monthly, vol. lii, No. 3, pages 354- 

 373), decided by the United States Supreme Court in 1893, it is 

 proposed to call attention here to additional and interesting fea- 

 tures of this case which have not been hitherto noticed in this con- 

 nection. 



The court having decided the situs for taxation of negotiable 

 instruments — railroad bonds, etc. — took occasion also to affirm the 

 taxable situs of such other personal property, or evidence of in- 

 debtedness, as is generally included under the term of choses in 

 action, using in so doing the following language: 



" But other personal property, consisting of bonds, mortgages, 

 and debts generally, has no situs independent of the domicile of 

 the owner, and certainly can have none where the instruments, con- 

 stituting the evidence of debt, are not separated from the possession 

 of the owner." 



As thus expressed, the reasons given by the court for separating 

 for taxation the situs of the two classes of personal property under 

 consideration are so clear, and so in accordance with common sense, 

 as hardly to require any further explanation; and, therefore, it 

 seems only necessary to assist the reader, who, if a taxpayer, is cer- 

 tainly interested in knowing the tax liability of his property, by 

 recalling that while, in the case of negotiable instruments, the title 

 to the property runs with the instrument and passes by delivery, in 

 the case of bonds, mortgages, and sales made to particular persons, 

 and thus non-negotiable, the title, on the other hand, does not run 

 with the instrument, but exclusively with the person of the owner; 

 so much so, that the attachment of a mortgage, or the possession 

 by theft or finding of a note payable to a person, does not in any 

 degree alienate or impair its original and legitimate ownership. The 

 decision of the court, therefore, brings all classes of personal prop- 

 erty under one harmonious and consistent rule for the purpose of 

 taxation, legal attachment, and protection, by affirming that their 

 situs as property is only where they are ; which in the case of visible 

 and tangible objects and negotiable instruments, is dependent, from 

 the very nature of things, upon actual and not constructive presence, 

 and in the case of choses in action upon the domicile of the owner; 



