of the ordinary notion of tangible property to include "credits." Yet in many States "money and credits" are coupled together as subjects of local taxation for all corporations.42

From "credits" a person is usually allowed to deduct debts in good faith owed by him, with certain exceptions.43 And it is well settled that choses in action, whether book accounts, promissory notes, or other credits due in the regular course of business carried on by a foreign corporation within a State, are taxable.44

§ 489. What property is situated within the State: property in transit.

In order that a chattel may be taxed in a State it must have not only a momentary situs there, but it must be fixed there with some degree of permanence. Thus property merely in transit through the State may not be taxed in that State." It is sometimes provided by statute that "property in transitu

45

42 Ala. Civ. Code, § 3911; Ark. Stat. § 6402; Cal. Const. Art. 13, § 1; Ill. Rev. Stat. ch. 120, § 1; Kan. Gen. Stat. ch. 158, § 12; La. 1898, No. 170, § 91; Mont. Const. Art. 12, § 17, Pol. Code, § 3680; Neb. Stat. § 4282; New M. Comp. L. § 4019; N. Y. Tax L. § 2; Ohio Rev. Stat. §§ 2744, 2731; S. Car Rev. Stat. 1893, § 217; Texas Rev. Stat. Art. 5067; Wash. Code, § 1657; Ont. Rev. Stat. 1897, ch. 224, § 2, cl. 10. So in Virginia, "bonds, notes, demands and claims," Va. 1890, ch. 244, § 8; see 1900, ch. 906.

See also Fla. 1898, ch. 4322, §§ 1, 3, 5; Ga. 1900, p. 21, § 8; Ky. 1902, ch. 128, Art. 2, § 16; Miss. Code, § 3751; Okla. Stat. § 5596; S. Dak. Stat. §§ 2134-2139; Utah Rev. Stat. §§ 2517, 2518; Vt. Stat. §§ 399, 400; Wis. Stat. §§ 1036, 1038; Wyo. Rev. Stat. § 1763.

43 Hubbard v. Brush, 61 Oh. St. 252, 55 N. E. 829; Ia. Code, §§ 1309, 1310, 1311; Kan. Gen. Stat. ch. 158, § 16; N. Y. Tax Act, § 6; Ohio Rev. Stat. § 2730; Ont. Rev. Stat. of 1897, ch. 224, § 7, cl. 24.

44 London, etc., Bk. v. Block, 117 Fed. 900; Armour Packing Co. v. Savannah, 115 Ga. 140, 41 S. E. 237; Hubbard v. Brush, 61 Oh. St. 252, 55 N. E. 829; People v. Barker, 48 N. Y. Supp. 553, 23 App. Div. 524; People v. Barker, 53 N. Y. Supp. 921, 31 App. Div. 263; Jesse French Piano & Organ Co. v. Dallas, (Tex. Civ. App.) 61 S. W. 942. See contra, Liverpool & L. & G. Ins. Co. v. Assessors, 44 La. Ann. 760, 11 So. 91, 16 L. R. A. 56. 45 Kelley v. Rhoads, 188 U. S. 1, 47 L. ed. 359; Standard Oil Co. v. Bachelor, 89 Ind. 1; Conley v. Chedic, 7 Nev. 336; Robinson v. Longley, 18 Nev. 71.

to or from this State, used, held, owned or controlled by persons residing in this State" shall be taxed in the State.46

§ 490. What property is situated within the State: vessels.

The problem is often presented by sea-going vessels and by the rolling-stock of railroads.47 A vessel may not be taxed in a State at the ports of which it merely touches, even if it habitually touches at them.48

"The State of California had no jurisdiction over these vessels for the purpose of taxation; they were not, properly, abiding within its limits, so as to become incorporated with the other personal property of the State; they were there but temporarily, engaged in lawful trade and commerce, with their situs at the home port, where the vessels belonged, and where the owners were liable to be taxed for the capital invested, and where the taxes had been paid." And such vessels are liable to taxation at their place of registration, or if

46 Ill. Rev. Stat. ch. 120, § 1; Neb. Stat. § 3897.

11 49

47 It is interesting to compare with the common-law doctrines on this subject the language of the German Reichsoberhandelsgericht in Mahler v. Schirmer, 6 Entsch. des R. O. H. G. 80, s. c., translated 2 Beale's Cases on Conflict of Laws, 190: "The Saxon judge may therefore be in a position to subject to the claims of his local law the decision of lawsuits about movables; but the admissibility of such subjection always depends on the actual assumption that the things have come within the jurisdiction of the Saxon law. The things must be situated within Saxony. But the momentary position is not entirely decisive; there are things which are constantly changing their position without thereby losing their legal relation to the place from which they started. This is especially true of the most important instruments of transportation, ships and railroad trains. During their journeys they touch at foreign places only in passing, with the intention of returning to the place where their legal relations are situated. The recognition of this place of departure as the place that governs their legal relations seems to be enjoined by practical necessity."

48 Hays v. Pacific Mail S. S. Co., 17 How. 596, 15 L. ed. 254; St. Louis v. Ferry Co., 11 Wall. 423, 20 L. ed. 192; Morgan v. Parham, 16 Wall. 471, 21 L. ed. 303; Johnson v. De Bary-Baya Mechants' Line, 37 Fla. 499, 19 So. 640, 37 L. R. A. 518; Roberts v. Charlevoix, 60 Mich. 197; S. v. Haight, 30 N. J. L. 428.

49 Nelson, J., in Hays v. Pacific Mail S. S. Co., supra.

there is no registration at the domicil of the owner. 50 "The property in question must be liable to taxation in some jurisdiction. If it were permanently located in another State it would be liable to taxation there. But the facts show that it is not permanently located out of the State. From the nature of the business, it is in one place today and another tomorrow, and hence not taxable, in the jurisdiction where temporarily employed. It follows that, if not taxable here, it escapes altogether. The rule as to vessels engaged in foreign or interstate commerce is that their situs for the purpose of taxation is their home port of registry or residence of their owner if unregistered.51 These vessels, if they may be so-called, are not registered. Hence their situs for taxation is the domicil of the owners. This rule must prevail, in the absence of anything to show that they are so permanently located in another State as to be liable to taxation under the laws of that State." 52

On the other hand, if the vessels, though registered abroad, are permanently located within the harbors of a State, they may be taxed there 53

§ 491. What property is situated within the State: rolling-stock of railways.

A similar problem is presented by the rolling-stock of railroads. If the rolling-stock is habitually used in a single State, it may of course be taxed in that State; but it will be almost impossible to assign it for purpose of local taxation to any particular place. It has been provided by statute in a few States that all the rolling-stock within the State shall be taxed at the principal office; 54 and the same view has been taken at common law, without statutory provision.55 Where 50 Com. v. American Dredging Co., 122 Pa. 386, 15 Atl. 443, 9 A. S. R. 116, 1 L. R. A. 237.

51 Citing Pullman's P. C. Co. v. Twombly, 29 Fed. 660; Hays v. S. S. Co., 17 How. 596, 15 L. ed. 254.

52 Paxson, J., in Com. v. American Dredging Co., supra.

53 Northwestern Lumber Co. v. Chehalis County, 24 Wash. 626, 64 Pac. 909.

54 Tex. Const. Art. 8, § 5; Wash. Const. Art. 12, § 17; Ore. Misc. L. § 2744. 55 Dubuque v. Ill. Cent. R. R., 39 Ia. 56.

the rolling-stock is used in more than one State, it is impossible for any State except that of the domicil of the owner to tax it as a whole; but where a number of cars owned by the same owner are constantly coming into and going out of a State, the State may by statute lay a tax on the owner proportionate to the average number of cars in the State.56

§ 492. What property is situated within the State: property temporarily in the State.

In the case of property sent into a State to be disposed of there, or obtained there to be exported, there is no objection at common law to imposing a tax.57 But it is not uncommon for a State by statute to relinquish the right of taxation, as it justly might, in such cases. "Money collected by any agent for any person, company or corporation which is to be transmitted immediately to such person, company or corporation, shall not be listed by such agent." 58 "A bond, mortgage, note, contract, account or other demand, belonging to any person not a resident of this State, sent to or deposited in this State for collection; the products of another State, owned by a non-resident of this State and consigned to his agent in this State for sale on commission for the benefit of the owner; moneys of a non-resident of this State, under the control or in the possession of his agent in this State, when transmitted to such agent for the purpose of investment or otherwise," are excepted.59

Under the New York statute, goods sent in merely for sale are not taxable whether they are in the hands of a mere agent for sale 60 or of the corporation itself, through its agent.61 56 Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 35 L. ed. 613; see infra, § 699.

57 Diamond Match Co. v. Ontonagon, 188 U. S. 82, 47 L. ed. 394; Standard Oil Co. v. Combs, 96 Ind. 179, 49 A. R. 156; Carrier v. Gordon, 21 Oh. St. 605. See also Blackstone v. Miller, 188 U. S. 189, 47 L. ed. 439.

58 Kan. Gen. Stat. ch. 158, § 13.

59 N. Y. Tax Act, § 13; P. v. Comrs., 59 N. Y. 40.

60 P. v. Comrs., 23 N. Y. 242.

61 P. v. Barker, 5 App. Div. 246, 39 N. Y. Supp. 151, aff. 149 N. Y. 623.

If, however, the corporation intends to establish a business within the State the statute does not apply.62

Conversely, if property is sent out of the State for a merely temporary purpose, to be returned when that purpose is accomplished, it has been held taxable in the State from which it is sent.63

Leventritt, J., said: "Tangible personal property, however, which has or has had its situs within this State, and is, or has been, sent from the State temporarily, is in my opinion within the spirit or intent of the act. The situs of such property remains here. The property of the relator outside of the State consists of cotton and silk goods in Massachusetts, whence, after being dyed and polished, they are required to be sent into this State to be manufactured into the articles dealt in by the relator. If the cotton and silk goods had been in this State so that dominion over them had been acquired, that property should not escape taxation merely because it is sent from the jurisdiction for a brief space, mayhap just prior to assessment day, to be brought back again as soon as prepared for the purposes of domestic manufacture. Even as our theory of taxation does not permit assessments against the personal property of foreign corporations not permanently invested here, so conversely, personal property of a domestic corporation temporarily out of the State, acquires no new situs, but retains that of its owner."

If the chattel remains within the State for a sufficient time to become part of the whole body of property there, incorporated with the chattels of the State, it may be taxed though

62 P. v. Barker, 157 N. Y. 159, 51 N. E. 1043. Martin, J., said: "The distinction between this case and the cases to which we have referred lies in the fact that it was the purpose and intent of the relator to establish a permanent and continuous business in the state of New York, which included both the manufacture and the sale of goods manufactured, and in the fact that it designated its principal place for the transaction of such business as 45 Murray street, in the city of New York."

63 P. v. Feitner, 32 N. Y. Misc. 84.

64 Citing People v. Comrs., 23 N. Y. 242; People v. Barker, 5 App. Div. 246, 39 N. Y. Supp. 151; People v. Barker, 157 N. Y. 159, 51 N. E. 1043.