City of Winston v. City of Salem

Cook, J.,

dissenting. By section 14, chapter 15, Laws .1899, cited and sustained in the opinion of the Court, the Legislature undertakes, to fix the situs of personal property (that which is tangible, substantial and valuable by reason of its corpus) for taxation in the township in which the owner resides, or where the corporation, partnership or joint stock association has its principal office or place of business. So that in this view, a person owning personal property of very great value situate and in use in a township or city, which may be in debt and required to levy taxes to meet its obligations, might move his residence out of that township or city into a township or city which owed no debt, and thus escape i axation therein, and yet receive all the benefits and protection enuring and resulting from such township or city indebtedness; so, likewise could a corporation, partnership or joint stock association obtain a like advantage by tlie removal or *409location of the principal office or principal place of business. If this be so-, then the non-residents of the township or city would receive equal benefit and protection with the residents and pay nothing for it, leaving the burden of paying for the same upon the residents, based upon the fancied idea that the personal property follows the person. To my mind, it is clear that this fiction was exploded, and so intended, by our Constitution, in ordaining that all taxes levied * * * shall be uniform and ad valorem upon all the property in the same — in the county, city, town, or township where it may abide, remain, be kept or placed by the owner, to the end that each article of value should there bear its proportionate part <»f the burden of taxation in consideration of the advantages, benefits and protection which it there has and enjoys.

Plaintiff and defendant are two separate and distinct municipalities, situated in the same (Winston) township, in Forsyth County, existing under separate charters. They adjoin each other, and are separated by a street (First street), which runs east and west, and which is owned and maintained by plaintiff.

The R. J. Reynolds Tobacco Company, a corporation having its principal office and factory building in Winston, and P. IT. Hanes & Company, a co-partnership, the several members of which reside in Winston, and also having its principal office and factory situate therein, are engaged in the manufacture of plug tobacco, and in buying, storing and preparing leaf tobacco for manufacture. On June 1, 1900, and for several years prior thereto, they had in buildings, leased for a term of years for such purpose, leaf tobacco kept therein for storage, until ready to be removed to the factories in Winston for manufacture. As both of the owners of the leaf tobacco, so kept for storage in Salem, have their principal offices and factories' in Winston, and the individual members of the co-partnership reside therein, plaintiff claimed that the tobacco *410so stored and kept in Salem was a subject of taxation for municipal purposes by it, and listed- tbe same for taxation, and insist that the taxes are due to it; while the defendant claims that said 'leaf tobacco being kept and stored within its corporate limits, was liable to taxation by it, and accordingly listed the same for taxation for its municipal purposes, and claims the taxes due thereon.

So the question presented in this appeal is, Do the taxes assessed upon the leaf tobacco so stored and so kept in Salem, belong to plaintiff under its assessment, because the owners reside in and have their principal office and factory in Winston ? Or, to state it in a different way, should the tobacco so stored and kept in Salem be listed for taxation for municipal purposes by the city of Winston, where the owners, corporation and co-partnership, had their principal office, or by Salem, where the property was. stored and kept until ready and needed for use at the factory?

As all personal property is movable, it can not be said to be permanently located anywhere; therefore it can not have a fixed or unchangeable abode. While movable at the owner’s will, it does' not in fact necessarily accompany its owner, but must be and exist where it is placed in the service or use for which he has designed it. Where the same is placed for an indefinite time, awaiting the use for which it is designed, or being used in the service of its owner while there in carrying on his business of a permanent nature, or for an indeterminate period, its presence there must be generally considered to have such an actual sities as would draw to it that legal protection for which it should be liable for taxation, if not otherwise prescribed by law.

But the situs of property subject to taxation by the county, city, town or township, is expressly fixed by Article VII, Sec. 9 of the Constitution, which requires the levy to be “upon all property in the same,” and that it shall be uniform *411and ad valorem. Tbe section is as follows: “All taxes levied by any county, city, town or township shall be uniform and ad valorem upon all property in the same, except property exempted by this Constitution.”

So it is necessary to determine what is meant by all property “in the same.” When is property “in the same” (city here), within the meaning of that section? This being determined, there can be no question as to the situs, as fixed by the Constitution. Real property being permanently located, there can be no question as to its situs; but on account of the movability of personal property in its use and service of its owner, there is some difficulty in determining when it is “in the same” (county, city, town or township) as a subject of taxation. It is clear that it is' not contemplated by the Constitution that it is “in the same” while in transit; otherwise it would be taxable in each and every municipality through Avhich it might pass on the 1st day of June. Nor can it be held that it would be exempt from taxation by the municipality if its usual situs or abode if temporarily in its use it be removed therefrom shortly before June the 1st; or should such temporary removal be made for the purpose of evading taxation by the municipality from which it is removed.

The meaning of the language of the Constitution does not admit of a doubt, or allow a question to be raised, concerning the situs of property for taxation, after it is determined where the owner has located it for his use or in his service. Its situs is fixed by the place where it is kept for use and service, and not by the residence of the owner.

With this understanding of section 9, Article VII, of the Constitution, as applied to that class of personal property which does not in fact accompany the person of its owner (the value of which grows out of its corpus or materiality, as distinguished from that class which is intangible and is but the evidence of right or interest in the corpus or materials of *412value which in fact does or in fiction of necessity must accompany its' owner), we think the plaintiff had no right to tax the leaf tobacco stored and kept in Salem. Whether the owner be a corporation or a natural person, its situs for taxation is where it is kept by its owner, where the owner allows i t to abide, to remain; there it must of necessity be under the protection of the legal authority enforced, and should bear its proper part of the expenses, which I understand to be the principle underlying this section of our Constitution.

The charters of plaintiff and defendant are in conformity with Article VII, section 9. Each is granted the power to levy and collect taxes upon “all real and personal property within the (its) corporate limits including” * * * Private Laws 1891, Chap. 40, Sec. 41 (1) ; Chap. 307, Sec. 50.

The facts agreed in this case show that the buildings of the respective owners were leased for a term of years, and that leaf tobacco was continually and continuously stored therein, and there prepared for manufacture. They kept a stock of tobacco there, upon which they drew for the factory to manufacture, and, a.s they drew out, would replenish the stock. So, the conclusion is irresistible that tire tobacco being put and kept in Salem by its owners for the purpose of storing and preparing for future use, it there acquired its situs for the purpose of taxation.