present law is but a modification of the law as passed in 1881 (Laws, 1881, c. 304)

History. The present law is but a modification of the law as passed in 1881 (Laws, 1881, c. 304). Constitution, 1780, Pt. Second c. 1, sec. 1, art. 4. The general court has power to impose and levy pro- portional and reasonable assessment, rates, and taxes, upon all the inhabitants of, and persons resident and estate lying, within the said commonwealth.

Present Law. Rev. Laws, 1902, c. 12 and 13. In Massachusetts mortgages are taxed as an interest in the real estate, and the parties to the mortgage may enter into a contract as to the payment of the taxes.

c. 12, sec. 16. If any person has an interest in real estate, not exempt from taxation, as holder of a duly recorded mortgage, the amount of his interest is to be assessed as real estate in the place where the land lies, and the mortgagor is to be assessed only for the value of the real estate, after deducting the assessed value of the interest of the mortgagee. If the estate is situ- ated in two or more places, the amount of the mort- gagee’s interest assessed in each is to be in proportion to the assessed value of the land given as security.

c. 12, sec. 17. The mortgagee’s interest in the real estate is not to be assessed at a greater sum than the fair cash valuation of the land and buildings.

c. 12, sec. 45. The mortgagor or mortgagee may bring to the assessor of the city or town where the real estate lies, a statement, under oath, of the amount se- cured, together with the name and residence of every holder of an interest therein, either as mortgagor or mortgagee.

c. 13, sec. 36. If a mortgagee of land situated in the place of his residence gives a written notice to the collector that he holds a mortgage on certain de- scribed land, the demand for payment is to be made on the mortgagee instead of the mortgagor.

c. 13, sec. 64. When the mortgagee pays taxes that should have been paid by the mortgagor, the amount paid is added to the obligation; and when the mort- gagor pays taxes that should have been paid by the mortgagee, the amount paid is deducted from the mortgage debt, unless in either case the parties have otherwise agreed in writing 1 .

Michigan

History. According to the law of 1882 (Acts no.

9, sec. 13) and the law of 1885 (Acts no. 153, sec. 13) mortgages were required to be listed as personal property. The mortgage was taxed in the same man- ner in 1887, Acts no. 262, but a more determined effort was made to get all the mortgages in the state. The plan followed was to have the registers of deeds report all mortgages recorded in their offices, to the supervi- sors and assessing officers of their respective counties, and to the registers of deeds of other counties where the mortgagee had his place of residence. In 1891 (Acts no. 200) a law was passed providing that mort- gages were to be taxed as an interest in the real es- tate, and that each party should pay taxes on his re- spective interest. Nothing was contained in the law forbidding contracts. In a case brought under this law, the court held that it was constitutional and that the mortgagor would, as under former statutes, be bound to pay the entire tax, subject only to the relief afforded him if the tax assessed against the mortgage interest was paid by the mortgagee, and that there was no obstacle in the act to prevent an agreement by the mortgagor to pay all taxes which might in the future be assessed against all interests in real prop- erty owned by him, including the interest as granted by the mortgagee. (Common Council v. Assessors, 91 Mich. 78, 1892.) The court also held that it was within the power of the parties to the mortgage to enter into an agreement that the mortgagor should pay the taxes assessed against the property, and that it was not the purpose of the legislature to limit that power. (Latham v. Board of Assessors, 91 Mich. 509, 1892.)

The law of 1891 was repealed in 1893 (Laws, no. 206) and the old law providing for the taxation of mortgages as personal property reenacted. The con- tract that the mortgagor is to pay a.l taxes on the mortgage or indebtedness secures, is very common in the mortgage forms in Michigan at the present time. The court has held that a covenant in a mortgage to pay all taxes levied upon the mortgaged property, “or upon or on account of this mortgage or the indebted- ness secured hereby,” is an agreement to pay the per- sonal tax assessed against the mortgagee on account of the mortgage, and that an agreement by a mort- gagor to pay the taxes assessed upon the mortgage as the personal property of the mortgagee is usurious where the lender knew that the aggregate of interest and taxes would exceed the maximum rate of in- terest allowed by statute, but it is not usurious where he believed it would not exceed that rate. (Green v. Grant, 134 Mich. 462, 1903)