tel mortgage to charge third parties with notice approved by this court is stated as follows: "That description which will enable third persons, aided by inquiries which the instrument itself indicates and directs, to identify the property, is sufficient." Smith v. McLean, 24 Iowa, 332. It was said in Muir v. Blake, 57 Iowa, 665, 11 N. W. Rep. 621, that a chattel mortgage which described the mortgaged property as "all the crops raised by me in any part of Jones county for the term of three years," was insufficient, and that "a chattel mortgage ought not to be a drag-net, covering a whole county, in any such general terms." But the description involved in that case was much more definite and certain than the one in controversy. This contains nothing which would direct third persons to the property sought to be mortgaged. It is true, if a debtor of the mortgagor were found, he might be interrogated as to the origin of the indebtedness, and by pursuing that or some other method it might be ascertained that the debt was owing to the mortgagor by reason of work done with a separator bearing the number given in the mortgage; but the law imposes no such burden upon third persons. They are under no obligation to exhaust every possible means of information before they can safely proceed to treat the property of the mortgagor as unincumbered. See Sperry v. Clarke, 76 Iowa, 506, 41 N.

as the property of natural persons. Its realty is taxable where situated, and its personal property at the principal place of business; and the stockholders, if taxed on their shares, are to be taxed where they respectively reside. When not separated by statute from their owner, the situs of the shares of stock follows and adheres to the

domicile of the owner."'9 This proposition, while in general accurate, is not strictly so, as in the case of foreign corporations, it is held that a different rule may be applied to them, and section eight of article four of the United States constitution is not thereby violated, as such corporations are not "citizens" within the meaning of the above section. Nor is such rule always in conflict with the "commerce clause" of said constitution.10 And Chief Justice Dixon held in case of a license required of a foreign insurance corpo

Rep. 310, and cases therein cited; Warner v. Wilson, 73 Iowa, 719, 36 N. W. Rep. 719.

SITUS OF TAXATION OF CORPORATIONS AND OF CORPORATE SHARES.

It was laid down by Chief Justice Waite that, "In corporations, four elements of taxable value are sometimes found: 1, franchises; 2, capital stock; 3, corporate property; and 4, shares of capital stock in the hands of the individual stockholders."'l Besides these the authorities mention that the business of a corporation may be taxed,2 interest on foreign held bonds, but not the bonds themselves, income, tax for each passenger carried within the States, accumulated profits of a bank, and dividends.8

6

The above list of items of taxation might, perhaps, be extended, but we are not concerned as to what may be taxed, except in so far as it may aid us in determining where the same may be taxed. "The property of corporations is taxable under the general laws of the State, and in the same manner

1 Tenn. v. Whitworth, 117 U. S. 129.

2 People v. Equitable Trust Co., 96 N. Y. 387.

8 U. S. v. Erie R. R. Co., 106 U. S. 327.

4 State Tax on Foreign Held Bonds, 15 Wall. 300.

5 Del. R. R. Tax, 18 Wall. 206.

6 Clark v. R. R. Co., 4 Hous. 158.

7 State Bank v. Milwaukee, 18 Wis. 281.

8 Board of Review v. Gas-light Co., 64 Ala. 269.

of the power of taxation as to the companies, but only a proper exercise of the police power, inherent in the sovereignty of the State."'11 Even if in the latter case it had been an exercise of the taxing instead of the police power, under the authority of Paul v. Virginia, supra, it would not have been a violation of the "commerce clause" of the United States constitution, as insurance companies in issuing policies are not engaged in interstate commerce. Nor does a tax on a grant to a foreign corporation, preclude the State from further taxing it.12 And under a law that "each fire, marine, and fire and marine insurance company incorporated or associated under the laws of any government or State other than one of the United States, shall annually pay, etc." it was held in Massachusetts that an English joint stock company was not a mere partnership, but was in the nature of a corporation, and was taxable in that State as other foreign corporations were taxed. 13 This case was affirmed on appeal by the Supreme Court of the United States. 14

With these general propositions established, a more particular examination of the subject under discussion is now in order, with refer

91 Desty on Taxation, § 77.

10 Paul v. Virginia, 8 Wall. 168.

11 Fire Dept. v. Helfenstein, 16 Wis. 136.

12 W. U. Tel. Co. v. Mayer, 28 Ohio St. 521.

13 Oliver v. Ins. Co., 100 Mass. 531.

14 10 Wall. 566.

ence, first, to the situs of taxation of the realty of corporations. As a general proposition, it needs no citation of authorities to show that such real estate is taxable only where situate, the same as the realty of natural persons. But the question often arises whether certain property is real estate, taxable where located, or personal property taxable where in legal contemplation the corporation resides. Thus in New York the question arose whether the "ties, stringers, rails" of a street railroad, located in a public street, were real or personal property, and it was held that they were real estate and taxable where situate, and not at the office of the company.15 The foundation columns and superstructure of the elevated railroads of New York city are real estate and taxable as such.16 So New Jersey taxed a bridge to the center of the Delaware river as real estate.17 The piers and abutments of such a bridge are real estate even if the corporation does not own the land upon which they rest, and the approaches are a part of the public highway.18 A boom consisting of piers, connected by logs, is real estate, and is taxable in the various towns where situated, and not as personalty at the office of the company.19 Where a dam extended across a river between two towns, and the water power thereby obtained was used in one of the towns only, it was held that such water power was taxable in the town only where used, while it seems that the dam itself is taxable in both towns.20 In New York gas mains laid underneath the streets are held to be personal property, and taxable at the office of the company. 21 While in Iowa gas and water mains are treated as fixtures, appurtenant to the real estate upon which the main works are located, and taxable there.22 In some States the railroads are taxed on their right of way as an entirety, and the aggregate is then apportioned among the several counties in or through which the roads run according to the length of the roads in each of the respective counties.23 In

15 People v. Cassity, 46 N. Y. 46.

16 People v. Com. of Taxes, 82 N. Y. 462.

17 State v. Metz, 29 N. J. L. 122.

18 Kittery v. Portsmouth Bridge, 78 Me. 93.

19 Hall v. Benton, 69 Me. 346.

20 Boston Mfg. Co. v. Newton, 22 Pick. 22.

21 People v. Assessors, 39 N. Y. 81.

22 Gas-light Co. v. Charter Oak Ins. Co., 51 Iowa, 31; Appeal of Des Moines Water Co., 48 Iowa, 324.

23 R. R. Co. v. Morris, 7 Kan. 210.

stock on its real, determine the real

others, such right of way is assessed separately by each county.24 It is very clear that a State cannot tax lands owned by a domestic corporation, which lands are located in another State; but if the State taxes such corporation on its capital and not nominal value, to value of such stock the value of the land situated in the other State may be taken into consideration.25 The above cases indicate that the difficulty lies in determining whether a certain item of taxable value is or is not real estate, and not in deciding which rule to apply when once determined to be real estate.

Passing to the consideration of the question where the personal property of corporations is to be taxed, it will be observed that the authorities disclose a lack of harmony in the rules relating thereto. It is generally true, as stated by Desty in the quotation given above, that the property of a corporation is taxable "in the same manner as the property of natural persons;" but it is not always true as he states that a corporation is taxable on "its personal property at the principal place "of business."26 This is especially true of tangible personal property, which is often taxed where located, and sometimes also at the place of business or principal office of the corporation; while such taxable values, as notes, bonds, mortgages, and the like are generally, though not always, taxed at the "residence" of the corporation. This leads to the question what and where is the "residence" of a corporation. "The residence of a corporation is the place where its principal office is located, or its principal operations carried on."27 In New York under a statute which provided among other things that: "All the personal estate of every incorporated company, liable to assessment on its capital, shall be assessed in the town or ward where the principal office or place for transacting its financial concerns of the company shall be; but if such company have no principal office or place for transacting its financial concerns, then in the town or ward where the operations of such company shall be carried on,' 28 it was held, where a corporation took out a certificate of incorporation

24 R. R. Co. v. Osborn, 12 Barb. 223.

25 Coal Co. v. Commissioners, 59 Md. 185.

26 1 Desty on Taxation, § 77.

27 Anderson's Law Dict. Tit. Residence.

28 Oswego Starch Co. v. Dolloway, 21 N. Y. 449.

which stated that the company was formed "for the purpose of carrying on the manufacture of starch in the city of Oswego," and that "the operations of the said company shall be carried on in the city of Oswego," and in compliance therewith the corporation established and run a factory for the manufacture of starch in said city of Oswego, but that its "principal office or place for transacting the financial concerns of the company" was located in the city of Auburn, that the certificate of incorporation was conclusive, and that the company was taxable on its personal property in Oswego, and not in in Auburn.28 And in Ohio, it was held, where a corporation owned vessels upon the great lakes, and had its residence by its articles of incorporation in Brooklyn, a town adjoining the city of Cleveland, and kept an office in such town where its annual election of directors was held, and other business of a general nature was transacted, while its main office was in the city of Cleveland where its financial business was carried on the year through, that the company was taxable on its personal property in the town of Brooklyn and not in the city of Cleveland and it was further held that if the city limits of Cleveland should be so extended so to take in the office of the company this did not make the corporation a resident of Cleveland, nor prevent the company from removing its office so as still to have it situated in the town of Brooklyn.29 But in Connecticut it was held that a corporation is taxable on its personal property where its principal office is located, irrespective of the fact that its articles of incorporation impliedly located it in an adjoining town, where its industrial operations were entirely carried on.30 "The proper seat of residence of a foreign corporation is the State which created it and which continues it in existence; otherwise, the corporation might reside in a multitude of jurisdictions. But legislation may give it a status as a resident.''31 So, in New York, where foreign insurance companies were required by law to deposit securities with the comptroller, it was held that such a company was taxable on its securities so deposited where its principal office within the State was located.32

29 Pelton v. Trans. Co., 37 Ohio St. 450.

30 Mid. Ferry Co. v. Middletown, 40 Conn. 65.

31 Anderson's Law Dict., Tit. Residence.

32 Ins. Co. v. Commissioners, 31 N. Y. 32.

It is a well settled rule of taxation that in the absence of a statute the place of taxation of personal property is the residence or domicile of the owner. 33 But it is equally well settled that for purpose of taxation, the situs of personal property may be separated from the domicile of the owner and given one of its own. 34 Some courts hold, however, that, irrespective of the domicile of the owner, such property is taxable where found.35

The taxation of bridges over streams which mark the boundary line between two States often gives rise to interesting questions. Where each State taxes the bridge as real estate, the solution is easy; but when taxed in any other way, the problem is not always so simple. As where the legislatures of Missouri and Illinois acted conjointly in incorporating a company to build a bridge over the Mississippi, it was held in the latter State that the legislatures of the two States had no power to act jointly to create one corporation, but that each State chartered a corporation of its own, and the corporation chartered by the legislature of Illinois was taxable in Illinois on its entire capital stock. In New Jersey it was held that a bridge company which had a bridge over the Delaware river, was taxable on one-half of its capital stock.3 In Pennsylvania it had previously been determined in respect to the same bridge company that it was taxable on its surplus funds. It was urged in argument that the company being incorporated by two States, each having concurrent jurisdiction, the company could not be taxed without the concurrent authority of the two States. But this doctrine was distinctly repudiated.38 But in the case of a similarly situated bridge it was afterwards held in the same State that only one-half of the capital stock of the company was taxable in that State. This is certainly the equitable doctrine, if corporations owning such bridges are to be taxed on their capital stock.

37

One doing business in another State from that of his residence may be taxed on such business where it is done, and he has no right

33 Herron v. Keeron, 59 Ind. 476.

34 Tappan v. Nat. Bank, 19 Wall. 491.

35 Selz v. Cregor, 104 Ill. 647.

36 Quincy Bridge Co. v. Adams Co., 88 Ill. 615.

37 State v. Metz, 32 N. J. L. 199.

38 Easton Bridge Co. v. County, 9 Pa. St. 415.

39 Pennsylvania v. Trenton Bridge Co., 9 Am L. Reg 298.

to object to paying the tax simply because he is not allowed to vote in such State. The maxim that taxation and representation should go hand in hand has no application to individuals as such. It has reference to political divisions only.40 Such a tax is purely a local tax.41 On the above principles it is held that a corporation which has an office in a State merely for recording and transferring shares of stock on its books is doing "business" in the State and can be taxed thereon; but it cannot be taxed on business outside of the State.42 So it was held that a Utah corporation engaged in mining and reducing ores in Utah, then sending its base bullion to Chicago to be refined, and then sending such refined bullion to the United States assay office in New York city, and having an office in the latter city for the sale of bullion, paying dividends, holding annual meetings of directors and for other business, was doing "business" within the State, and was therefore taxable in New York.48 Upon this principle the company would be liable to taxation on its business in three places, namely: Utah, Chicago and New York.

The franchises of a corporation may be taxed.44 The State may tax the right to operate a road within the State.45 Franchises are not property in the strict sense of the word, yet the value of the property owned by the corporation may be taken into account in ascertaining the value of the franchises.46 A tax on such franchises is a personal tax,47 and taxable only at the residence of the corporation.48 A foreign corporation cannot be taxed on its franchises.49 It was held in Pennsylvania that the State could tax foreign held bonds, that were secured by mortgage upon railroads within the State.50 Upon appeal, the Supreme Court of the United States reversed this decision, and held; 1. That the power of taxation by a State is limited to persons, property, and business within the State; 2. As a corallary to the above the tax laws of a State can have no extraterrito40 Moore v. Commissioners, 80 N. Car. 154. 41 Youngblood v. Sexton, 32 Mich. 406. 42 People v. Eq. Trust Co., 96 N. Y. 387.

43 People v. Mining Co., 105 N. Y. 76.

44 Tennessee v. Whitworth, 117 U. S. 129.

45 State v. McFetridge, 56 Wis. 256.

46 Commissioners v. Bank, 123 Mass. 493.

47 Nail Co. v. People, 98 Ill. 399.

48 1 Desty on Taxation, § 76.

49 People v. Equitable Trust Co., 96 N. Y. 387.

0 Maltby v. R. R. Co., 52 Pa. St. 140.

rial effect; and, 3. The debt being the principal thing, and not the mortgage by which it was secured, and being personal it followed the owner, and if the owner was a non-resident he could not be taxed thereon.51 A resident of Georgia, living during the summer months in New Jersey, is not taxable in the latter State on bonds of a New Jersey railroad owned by him.52 But interest on foreign held bonds is taxable, as it is essentially a tax on the earnings of the railroad. 53 In the latter cases Mr. Justice Fields vigorously dissents, and it must be confessed that it is somewhat difficult to reconcile this case with that of the case of State tax on foreign held bonds, supra, as it is essentially a tax on personal property of persons without the jurisdiction. jurisdiction. That personal property is not always taxed at the domicile of the owner is shown by a case in Missouri, where an owner of bonds sent them to New York for safekeeping, and it was held that the bonds were not taxable in Missouri at the residence of the owner.54

The income of a corporation may be taxed,55 but only upon that part which is earned within the State.56 Dividends already declared are taxable to the owner where he resides; if not declared they are assessable to the corporation, where it resides.57 But the legislature cannot require a domestic corporation to reserve and pay into the treasury of the commonwealth a certain portion of the dividends on shares held by non-residents.58

51 State Tax on Foreign Held Bonds, 15 Wall. 300. 52 State v. Ross, 3 Zab. 517.

53 R. R. Co. v. Collector, 100 U. S. 595; U. S. v. R. R. Co. Co., 106 U. S. 327.

54 Valle v. Ziegler, 20 C. L. J., 271.

55 Phil. Contributorship v. Commonwealth, 98 Pa.

St. 48; Nichols v. N. H. & N. Co., 42 Conn. 103.

56 State v. Railroad Co., 48 Md. 49.

57 County v. Gas-light Co., 64 Ala. 269.

58 Oliver v. Various Corporations, 11 Allen, 268.

59 Trust Co. v. R. R. Co., 3 Dill. 412.

60 R. R. Co. v. Alexandria, 17 Grat. 176.

61 Davenport v. R. R. Co., 16 Iowa, 348.

62

distribution throughout the various countie in or through which the road runs. When such rolling stock, as well as other property of a corporation is employed in interstate commerce, a constitutional factor enters into the problem, which will presently be examined.

And first, it may be well to lay down a few fundamental propositions, as regards the taxing power of the States. It was said by Chief Justice Gibson that, "In every government taxation is the attribute of sovereignty" and "as regards taxation there, there is no limitation of it." 63 The power of the State to tax is unlimited, except as restricted by the national constitution, and its own. But nothing is subtracted from the power of the State, except what is expressly or by necessary implication withdrawn. 65

An innocent purchaser for value of personal property from a vendor who obtained possession of that property by means of fraudulent representations, and who holds it as a mere bailee, acquires no title to the property, and the defrauded owner may maintain replevin.

ROTHROCK, J.: 1. The court made special findings of the facts which it was thought were established by the evidence. We need not set out these findings in detail, but will recite such as are deemed material to a determination of the rights of the parties upon an appeal. The plaintiff is a dealer in diamonds at the city of Omaha, in the State of Nebraska. In the month of December, 1888, one J. J. Barker made his appearance at the plaintiff's place of business, and represented that he had a customer for a diamond ring and stud. and desired to examine the plaintiff's goods. He seclected the ring and stud now in controversy, and the plaintiff delivered them to him to take them and show them to the party who desired to make the purchase. The sum of $450 was fixed as the price of the diamonds, and Barker was to return them, or return with the price, in an hour. The plaintiff saw no more of Barker for two or three days, when he succeeded in having an interview. Barker at first stated that he had been robbed of the diamonds; said he had

been knocked down and robbed, and called attention to certain bruises on his face and marks on his fingers. The plaintiff threatened to have Barker arrested, and then he stated he had lost the diamonds at a gambling house; and afterwards he stated that they were in possession of the defendant, Clark, at Council Bluffs. It was afterwards ascertained that Barker, after obtaining possession of the diamonds, crossed the Missouri river to Council Bluffs, and stopped at a gambling-house kept by one Carrigg. While there he was in urgent need of money, and Carrigg advanced money to him, from time to time, and took and held the diamonds as security. When these advancements amounted to the sum of $247 Carrigg refused to make further advancements, and he and Barker went to the defendant with the diamonds, and sold them to him for the sum of $275, and Clark paid Carrigg, the keeper of the gambling-house, the sum of $247, and he paid Barker the balance, being $28. Barker represented to the defendant that the diamonds belonged to him. There are other facts disclosed in evidence as to efforts made by plaintiff to obtain payment for the property, and offers to purchase the diamonds from Clark, which are of no importance in the case. The plaintiff did no act which would in law estop him from asserting any claim he may have had at any time to recover the property from Clark. The court found that Clark was an innocent purchaser for value, and we incline to think that finding was correct. The only real question in the case is whether Clark is entitled to the property as an innocent purchaser? Other facts might be stated which authorize the conclusion that Barker obtained the possession of the goods by fraudulent representations, but enough has been stated to show that the court was fully authorized in finding that Barker had no customer for valuable diamonds. The fact that he did not return in an hour, but repaired to a gambling-house, and pledged the diamonds to the keeper of the house, fully warrants the finding that he obtained possession of the property by fraud. If the plaintiff had sold and delivered the diamonds to Barker upon these representations, and Barker had resold to the defendant, he being an innocent purchaser, the plaintiff could not maintain this action. It is well settled that when goods are obtained from their owner by fraud, and the facts show a sale to the party guilty of the fraud, an innocent purchaser of the goods from the fraudulent vendee for value, and without notice of the fraud, will take the title. The true inquiry is, did the owner intend to transfer both the property in and possession of the goods to the person guilty of the fraud. If he did, there is a contract of sale, however fraudulent the device, and the property passes, and subsequent innocent purchasers for value will be protected. Rowley v. Bigelow, 12 Pick. 312; Perkins v. Anderson, 65 Iowa, 398, 21 N. W. Rep. 696; 1 Pars. Cont. 520. And see Starch Co. v. Lendrum, 57 Iowa, 573, 10 N. W. Rep. 900, in which the rule