[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 244 As this case is presented to us by the arguments and concessions of the counsel, we are not called upon to consider the general question of the mode of taxation applicable to corporations, within this State, under our statutes governing that subject. The points upon which our judgment is sought are two, which we will consider in their order. The first is, whether an error of law has been committed in subjecting to taxation certain steamships which, though owned by the relator and registered by it at the port of New York as their home port, in accordance with the laws of the United States, were subsequently, and before the period for which the taxes in question were imposed, sent to the Pacific ocean and there employed in the trade of the relator. None of them have been since registered anew, nor have any of them returned to the port of New York since they were sent to the Pacific. Upon these facts, it is insisted on the part of the relator that it is not taxable in respect to them or their value. This freedom from New York taxation is claimed upon the general ground that they are not personal property within the State, and are therefore not taxable here. Nothing is claimed on the particular ground of corporate taxation, but the case is rested upon the principles and rules of law applicable to property of this sort, so situated as this is, owned by a taxable individual, natural or artificial, resident in this State.
In the cases of Hays v. The Pacific Mail Co. (17 How., 596) and Morgan v. Parham (16 Wallace, 471) the Supreme Court of the United States held with respect to vessels *Page 246 employed away from their home ports, that the States in which they came or remained in the course of their employment, had no authority to impose taxes; that this jurisdiction belonged to the States where their home ports were situated; that their legalsitus for purposes of taxation was in their home ports, and that this was not lost by mere absence and employment elsewhere. The situs dependent on registration continues until a newsitus is acquired; the law in this respect assimilating itself to the law as to domicile, which remains until a new domicile is acquired. In the case of The People ex rel. Hoyt v. TheCommissioners of Taxes (23 N.Y., 224) while it was decided that personal property of a resident of this State, actually situated in another State and taxed there, was not taxable here as part of the resident citizen's personal property, it was conceded that the rules announced only applied to property which was capable of having an actual situs, and which had one in fact. That debts and choses in action, in general, follow the domicile of the owner, and that ships at sea, if registered at a port within the State, have no situs elsewhere, and are to be assessed in the State. It is true, ships at sea, are mentioned, but the being at sea is, obviously, not the essence of the matter; it is the having a situs where registered, and not elsewhere, that is the controlling consideration. Otherwise, their situs becomes wholly uncertain, for they are either at sea, or in port preparatory to going to sea, and to enable them to be at sea. Being in port is only a necessary incident in their proper employment. They are not built to be in port, but upon the sea. To determine their situs, for purposes of taxation, by their longer or shorter stay in a particular port, or by their more or less frequent resort to it, would introduce perpetual uncertainty; it would, practically, subject them to taxation in every port, or exempt them in all. We are of opinion that the rule adopted in the cases in the United States courts and followed in the judgment appealed from, is the better rule, and is in accordance with the statutes regulating taxation in this State.
The second question, stating it most favorably to the *Page 247 appellant, depends upon the effect of the clause of the contract under which certain vessels were building in Delaware. The relator insists that, as payments were made, it became the owner to that extent of those vessels, and was therefore not taxable in respect to the amounts thus expended. In this construction we cannot concur with the appellant. The general rule of law upon the subject is that the title remains in the builder until delivery, unless an agreement to the contrary appears. (Merritt v. Johnson, 7 J.R., 473; Andrews v. Durant, 1 Kern., 35.)
The contract provides that the relator shall have a lien on, and ownership in the vessel, as its building progresses, up to the amount or amounts paid on account of its contract; such lien and ownership to attach simultaneously with such payments; and further, that the builder should keep such vessel and materials fully protected, by insurance, against fire; the policies of insurance for the same to be for account of, and made payable to, the relator. This, taken in connection with the statement of the relator that the steamers were being built under contract and that none of them had been delivered to the company, and that the payments made to the contractors had been made on account of their contracts, characterizes the interest of the relator as being not an absolute ownership, but only an interest in the nature of a lien for its money advanced, which might or might not ripen into a title to the vessels in construction. Only in the case of absolute ownership would there be such a conversion of taxable money into steamships having a situs in Delaware as to make them not taxable in New York.
We are of opinion that no error has been committed to the prejudice of the appellant, and the judgment must be affirmed, with costs.
All concur.
Judgment affirmed. *Page 248