Monidah Trust v. Sheehan

MR. JUSTICE HOLLOWAY

delivered the opinion of the court.

The Monidah Trust is a corporation organized under the laws of Delaware and transacting business in Montana, Idaho, Washington, California, and elsewhere. James A. Murray is president, and E. L. Chapman, secretary and treasurer. These two individuals, with James E. Murray and W. W. Knox, constitute the stockholders and directors. Of the 10,000 shares of the capital stock, James A. Murray owns 9,988, and each of the other stockholders owns four shares. The corporation was organized about 1904. James A. Murray, James E. Murray, and Chapman are residents of Montana, while Knox is a resident of Delaware. The company maintains offices in Delaware, Montana, and California. On July 29,1908, the plaintiff loaned to the State Savings Bank Realty Company $300,000, and took therefor three promissory notes of $100,000 each, secured by mortgage. While it does not appear affirmatively that the property subject to the mortgages is located in Silver Bow county, apparently it is. The loan was made in Butte. In 1911 the assessor of Silver Bow county apparently took from the records of that county the list of the mortgages and assessed to the plaintiff company solvent credits for the full face value of the notes secured by the mortgages, and the tax for that year was levied upon the amount and returned to the county treasurer for collection. Plaintiff applied to the board of equalization for relief, but was refused. It then tendered to the county *430treasurer tbe amount of taxes due upon its property in Silver Bow county, exclusive of tbe mortgages; but the tender was refused. The taxes became delinquent, and certain real estate belonging to tbe plaintiff in that county was advertised for sale to satisfy the county’s claim. Upon a verified complaint setting forth the fact that the notes secured by the mortgages, and the mortgages, are owned by the plaintiff, which has its domicile in the state of Delaware, and that the notes and mortgages were never held or kept within the state of Montana during the year 1911, the district court issued an order to show cause and upon a hearing granted an injunction pendente lite. From that order the coúnty and the county treasurer, who are made defendants, appealed.

Counsel for appellants contend that any foreign corporation doing business in this state is liable to taxation upon its solvent credits, so far as the same arise out of business transacted in this state. “Mobilia personam, sequuntur” is a maxim of law as old as the law itself, and while it cannot be invoked merely to shield one from the payment of taxes, the presumption [1] nevertheless attaches that personal property, and particularly intangible personal property, such as credits, has its situs, for the purposes of taxation, only at the domicile of the owner. In Holland v. Commissioners, 15 Mont. 460, 27 L. R. A. 797, 39 Pac. 575, this court said: “But, as said before, the case at bar is not excepted from the general rule that ‘securities, such as mortgages and the like, are deemed to have no situs except that of the domicile of the owner,’ hence are not subject to taxation in this state if the domicile of the owner is without the state.”

It may be conceded, for the purposes of this appeal, that it is within the power of this state to divorce property of this character from the person of its owner and give to it a situs of its own for the purposes of taxation; but the state has not undertaken to do so. The provision of section 7, Article XII, of our Constitution: “The power to tax corporations or corporate property shall never be relinquished or suspended, and all corporations in this state, or doing business therein, shall be subject *431to taxation for state, county, school, municipal and other purposes, on real and personal property owned or.used by them and not by this Constitution exempted from taxation” — does not do more than announce a general rule applicable to property which is ordinarily the subject of taxation; while section 11 of the same Article indicates clearly that the state was not attempting to do more. That section reads: “Taxes shall be levied and collected by general laws and for public purposes only. They shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.” Section 2521, Revised Codes, provides: “The property of every firm and corporation must be assessed in the county where the property is situate, and must be assessed in the name of the firm or corporation.”

In Gallatin County v. Beattie, 3 Mont. 173, this court had under consideration the same question now before us, in a somewhat different aspect. In that case the taxpayer was a resident of Lewis and Clark county and held mortgages upon real property situate in Gallatin county. The taxing authorities of Gallatin county sought to subject the credits to taxes in that county, and to this end made the assessment from the records there, just as the assessor of Silver Bow county undertook to do in this instance. But in that case this court held that the mortgages were mere chattels, subject to taxation in the county where actually found; that the records of mortgages were not' the mortgages, but only copies, and since the mortgages themselves were not in Gallatin county, the assessment of them there was void.

Assuming that the domicile of this plaintiff is in the state [2] of Delaware, these credits presumptively have their situs in that state. There is not any evidence in the record that the mortgages were in this state at any time during the year 1911; while the testimony, though not very direct or certain, tends to show that they were not. The' presumption is in favor of their situs in the state of Delaware, and this presumption was not overcome.

*432But it is insisted that the plaintiff is what is frequently termed [3] a “tramp corporation”; that is, “a corporation which is chartered in one state — usually by the citizens of another state —without any intention of doing business in the former state, but solely to operate in other states.” (Thompson on Corporations, sec. 6632.) And therefore, as respects business transacted in Montana, it should be regarded as a resident of this state and as domiciled here for the purposes of taxation. The evidence, however, fails altogether to support this view. It does not appear who organized the corporation or for what purposes it was created. The mere fact that residents of this state now own the controlling interest in the stock is not sufficient to impeach the good faith of the incorporators or to change the domicile of the corporation to this state. Neither the by-laws of the corporation nor the laws of Delaware were before the lower court, and neither are they before us. The effort to give the corporation a domicile in this state therefore fails, and it cannot be said that the acts of the officers or directors were not fully authorized.

The granting of injunctions pendente lite is so largely a [4] matter of discretion that this court will not interfere unless there is a manifest abuse of that discretion. (Consolidated G. & S. Min. Co. v. Struthers, 41 Mont. 551, 111 Pac. 150; Parrot S. & C. Co. v. Heinze, 25 Mont. 139, 87 Am. St. Rep. 386, 64 Pac. 326, 53 L. R. A. 491; Heinze v. Boston & Mont. C. C. & S. Min. Co., 30 Mont. 484, 77 Pac. 421.)

No error appearing in the record, the order is affirmed.

Affirmed.

Mr. Chief Justice Brantly and Mr. Justice Smith concur.