No one species of property, from which a tax may be collected

West Virginia

Constitution, 1872, art. 10, sec. 1. Taxation shall be equal and uniform throughout the state, and all property, both real and personal, shall be taxed in pro- portion to its value, to be ascertained as directed by law. No one species of property, from which a tax may be collected, shall be taxed higher than any other species of property of equal value.

Present Law. Code, 1906. In West Virginia mort- gages are taxable as personal property (sec. 747, 794). Debts may be deducted from credits (Laws, 1907, c.

80, sec. 67).

Wisconsin

Constitution, 1848, art. 8, sec. 1. The rule of tax- ation shall be uniform, and taxes shall be levied upon such property as the legislature shall prescribe.

Present LCKW. Laws, 1903, c. 378. In Wisconsin, whenever any taxable real estate is subject to mort- gage, the mortgage is deemed an interest in the real estate and assessed and taxed in the assessment district where the real estate is located. The interests of the mortgagor and mortgagee may be separately assessed, or at the option of the mortgagor, both may be as- sessed and taxed together. If separately assessed, the interest of the mortgagor is to be taken for only sucb amount as remains after deducting the assessed value of the interest of the mortgagee from the as- sessed value of the entire real estate, and the valua- tion of the interest of the mortgagee is to be accord- ing to the true value, but not to exceed the just valu- ation which should be placed upon the mortgaged real estate if unencumbered. If both interests are as- sessed together without separate valuation, they are assessed to the mortgagor or occupant, the same as un- encumbered real estate, and the combined valuation of both interests is not to exceed the just valuation which should be placed upon the real estate, if unen- cumbered.

The deduction of debts from credits is not allowed in the case of any mortgage required to be assessed as an interest in real estate.

The law does not apply to mortgages held by in- surance companies or other persons or associations ex- empt from taxation nor to mortgages on property as- sessed by a state board of assessment, nor to mort- gages upon property of persons, associations, or cor- porations taxed by license fee or other special method. The law applies only to mortgages upon property sub- ject to direct assessment and taxation under the gen- eral assessment and tax laws of the state.

Wyoming

Constitution, 1889, art. 15, sec. 11. All property, except as in this constitution otherwise provided, shall be uniformly assessed for taxation, and the legislature shall prescribe such regulations as shall secure a just valuation for taxation of all property, real and per- sonal.

Laws, 1907, c. 602. Mortgages are included in the classification of all personal

Tennessee

Constitution, 1870, art. 2, sec. 28. All property real, personal or mixed, shall be taxed. All property shall be taxed according to its value, that value to be ascertained in such manner as the legislature shall di- rect, so that taxes shall be equal and uniform through- out the state.

Present Law. Laws, 1907, c. 602. Mortgages are included in the classification of all personal property liable to assessment (sec. 8, class 7). In a suit brought to collect any chose in action, if the defend- ant can prove that the holder did not give in such credit for taxation for the preceding year, the owner is to be taxed with all the court costs of the case (sec. 14).

Texas

Constitution, 1876, art. 8, sec. 1. Taxation shall be equal and uniform. All property in this state, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.

Present Law. Rev. St. 1897. Mortgages are tax- able as personal property, and personal property for the purposes of taxation is deemed to include all mon- eys at interest due the person to be taxed over and above what he pays interest for, while the term “credits” means all demands secured by deed or mort- gage (sec. 5063, 5064).

Utah

Constitution, 1895, art. 13, sec. 2. All property in the state, not exempt under the laws of the United States or under this constitution, shall be taxed in pro- portion to its value, to be ascertained as provided by law. (The word “property” includes money and credits.)

sec. 12. Nothing in this constitution shall be con- strued to prevent the legislature from providing a stamp tax or a tax based on income, occupation, li- censes, franchises or mortgages.

Present Law. St. 1898, Laws, 1905. Mortgages are taxable as personal property. The assessor may require a statement of all solvent credits, secured or unsecured, from any person. He may deduct from the sum total of such credits only such debts secured or unsecured as may be owing by the person assessed (Laws, 1905, c. 125). The county recorders must transmit to the assessor of the county in which the mortgagee resides a complete abstract of all mortgages remaining unsatisfied on the records of his office, Stat- utes, (sec. 2531).

Vermont

Constitution, 1793, c. 1, art. 9. No part of any per- son’s property can be justly taken from him, or ap- plied to public uses, without his own consent, or that of the Representative Body of the freemen. Previous to any law being made to raise a tax, the purpose for which it is to be raised ought to appear evident to the legislature to be of more service to the community than the money would be if not collected.

Present Law. St., 1906, sec. 504. Mortgages are taxable as personal property (sec. 559). The town clerk is required to prepare a statement of all mort- gages, together with the amount secured, for the use of the listers.

Virginia

Constitution, 1902, art. 13, sec. 168, All property, except as herein provided, shall be taxed; all taxes whether state, local, or municipal, shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.

Present Law. Laws, Ex. Session, 1903, c. 148. It would seem that mortgages are taxable in two ways in Virginia. First, all bonds, notes, and other evi- dences of debt, whether secured by deed of trust, judgment or otherwise, are subject to a tax of twenty- five cents on every hundred dollars of value for the expenses of government, and a further tax of ten cents on every hundred dollars of the value for the’ support of the free public schools (sec. 8 and 9). Second, every contract relating to real estate or per- sonal property, whether it be a deed or not, is sub- ject to a tax of fifty cents when admitted to record. When the consideration exceeds three hundred, but does not exceed one thousand dollars, the tax is to be one dollar and where the consideration exceeds one thousand dollars, an additional tax of ten cents on every one hundred or fraction, is levied. Deeds of trust and mortgages given by railroad and other in- ternal improvement companies are subject to the same tax. In the case of railroads the amount of the mort- gage indebtedness, subject to the rate as levied, de- pends upon the proportional number of miles of the line within and without the state (sec. 13).

Washington

Constitution, 1889, art. 7, sec. 1. All property in the state, not exempt under the laws of the United States, or under this constitution, shall be taxed in proportion to its value, to be ascertained as provided by law.

History. During the extraordinary session of the legislature held in 1901 (c. 2), a law was passed pro- viding that mortgages and all credit for the purchase of real estate were not to be considered as property for the purposes of taxation. This law remained in force until the present law was enacted in 1907.

Present Law. Laws, 1907, c. 48. Under the pres- ent law all moneys and credits are exempt from taxa- tion. The law states that all mortgages, notes, ac- counts, moneys, certificates of deposit, tax certificates, judgments, state, county, municipal, and school dis- trict bonds and warrants, are not to be considered as property for the purposes of taxation, and no deduction is to be allowed on account of an indebtedness owed.

Tax payers are required to make a re- turn under oath

Pennsylvania

Constitution, 1874, art. 9, sec. 1. All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.

Present Law. Dig. 1894, vol. 2, p. 1963. ff. sec. 1, 2. All personal property mortgages are specifically mentioned owned, held, or possessed, by any person or corporation, is taxable annually for state purposes at the rate of four mills on each dollar of its value.

sec. 3, 6. Tax payers are required to make a re- turn under oath, showing the property held, owned, or possessed by them in their own right, or in any other capacity. If they refuse to make out this re- turn properly verified by oath, the assessor must make it out from the information he is able to obtain, and after this list is revised and corrected by the county commissioners or board of revision, 50 per cent is added to form the aggregate amount for taxation.

sec. 8, 10. The register of deeds keeps a separate list containing detailed information relating to each mortgage recorded in his office, this list is filed each month in the commissioner’s office or with the board of revision of taxes. If the mortgagee resides in an- other county, a certified statement containing the in- formation required for assessment is transmitted to the proper officers of the county where he does reside.

sec. 11, 12. The county commissioners, or board of revision of taxes, with the information in their pos- session, prepare statements and deliver them to the assessors showing the number and amount of mort- gages held by each person within the different assess- ment districts of the county. With this list at hand, the assessor is able to compare and check up the re- turns made and sworn to by each person and corpora- tion.

sec. 18, 19. The tax is collected and paid to the county and city treasurers, and they in turn pay it to the state treasurer. Three-fourths of the net amount collected from mortgages and other forms of personal property is returned to the counties for their own use.

sec. 26. It is unlawful for any person or corpora- tion loaning money at interest to require the borrower to pay the taxes imposed by this act, and in all cases where the taxes are paid by the borrower, the law re- quires that such payments be deemed usury and pun- ishable as such. This law was amended in 1899 (no. 39) and in 1905 (no. 134), but no material change was made.

Rhode Island

Constitution, 1842, art. 4, sec. 15. The general as- sembly shall, from time to time, provide for making new valuations of property for the assessment of taxes, in such manner as they deem best.

Present Law. Laws, 1905, c. 1246. In Rhode Is- land mortgages are taxable as personal property. Both real and personal property are taxable (sec. 2) and personal property for the purposes of taxation is deemed to include debts due from solvent persons (sec. 5).

South Carolina

Constitution, 1895, art. 10, sec. 1. The general assem- bly shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe regu- lations to secure a just valuation for taxation of all property, real, personal and possessory.

Present Law. Code of Laws, 1902, vol. 1, sec. 260, 268, 271. In South Carolina mortgages are taxable as personal property.

South Dakota

Constitution, 1889, art. 11, sec. 2. Ail taxes to be raised in this state shall be uniform on all real and personal property, according to its value in money.

Present Law. Rev. Code, 1903. Mortgages are taxable as personal property. Credits are held to mean and include all claims and demands secured by deeds or mortgages due or to become due (sec. 2052), and all resident tax payers are required to list all mon- eys and credits, moneys loaned or invested (sec. 2058).

Compiled Laws, 1897. Property under mortgage or lessor, unless it is listed by the mortgagee, or lessee (sec. 4022).

New Mexico

Compiled Laws, 1897. Property under mortgage or lessor, unless it is listed by the mortgagee, or lessee (sec. 4022).

New York

History. In New York mortgages used to be taxed as personal property (Laws 1896, c. 908). In 1905 (c. 729) an annual tax of five mills was imposed on each dollar of the amount of the principal debt or obligation secured. After the necessary expenses were paid, the amount remaining was distributed equally between the county and the state. At the present time a recording tax of fifty cents on the one hun- dred dollars, or major fraction thereof, is levied. This law was passed in 1906 (c. 532) and amended in 1907 (c. 340).

Present Law. Laws, 1906, c. 532 and Laws, 1907, c. 340.

Laws, 1907, c. 340, sec. 290. Under the New York law the word mortgage is defined to include every mortgage on real property, mortgages where part of the security is personal or other property, exec- utory contracts, and contracts or agreements by which the indebtedness, secured is added to or increased.

Laws, 1907, c. 340, sec. 293 b. This definition does not include correction mortgages or mortgages in which additional security is given but the debt is not increased.

Laws, 1907, c. 340, sec. 293. The recording tax imposed amounts to fifty cents for each one hundred dollars, or major fraction of the principal- debt or obligation secured. The exemptions of the minor fraction does not hold for mortgages of less than one hundred dollars, all mortgages no matter how small must pay a recording tax of at least fifty cents.

Laws, 1907, c. 340, sec.: 293 a. As a rule holders of mortgages -made prior to July 1, 1906, may pay the recording tax and have their mortgages exempt from the personal property tax which they would otherwise be subject to.

. Laws, 1907, c. 340, sec. 293 c. Mortgages for in- definite amounts or for contract obligations are taxed as. if equal in amount to the property given as secur- ity, unless the owner files with the recording officer a sworn statement of the maximum amount secured or which, under any contingency, may be secured by the mortgage. If this is done, the amount given in the sworn statement is taken as the basis for assessment.

Laws, 1906, c. 532, sec. 294. When any mortgage is recorded, a receipt showing that the tax has been paid is recorded with the instrument.

Laws, 1907, c. 340, sec. 295. No mortgage of real property which is subject to taxation is to be released, discharged of record or received in evidence in any action or proceeding, no assignment of or agreement extending- any mortgage is to be recorded, and no mortgage is to be foreclosed unless the taxes have been paid as provided by law.

Laws, 1907, c. 340, sec. 296. Mortgages made by corporations in trust to secure the payment of bonds or obligations issued or to be issued thereafter, may contain a statement of the amount advanced, or ac- crued, or which is then secured by the mortgage; the tax payable on the recording of the mortgage is then computed on the basis of the amount stated to be se- cured. Whenever an additional amount is to be ad- vanced under the original mortgage, a statement must be filed and the additional taxes paid.

Laws, 1907, c. 340, sec. 297. When the property given as security is located in more than one county, or partly within and partly without the state, the state board of tax commissioners determines the propor- tion of the tax that should go to each county or to the state of New York.

Laws, 1907, c. 340, sec. 298. The first of each month the recording officer of the county pays to the county treasurer, after deducting the necessary ex- penses of his office as allowed by the act, all moneys received from taxes on mortgages. In the counties of New York, Kings, Queens, and Richmond, the money is paid to the chamberlain of the city of New York. The treasurers of the counties and the cham- berlain of the city of New York, after deducting the necessary expenses of their offices, transmit one-half of the net amount collected to the state treasurer. The remaining portion in the counties of New York, Kings, Queens, and Richmond, is to be paid into the general fund of the city of New York to be applied to the reduction of taxes, and in the other counties, the remaining portion is to be held by the respective county treasurer subject to the order of the board of supervisors. In the end this money is used for the payment of school taxes and for state, county, city, village, and town expenses.

Laws, 1906, c. 532, sec. 300. The state board of tax commissioners has general supervisory powers over all recording officers and may make such rules and regulations as it deems proper and the state comp- troller has general supervisory powers over all county treasurers and the chamberlain of the city of New York.

North Carolina

Constitution, 1876, art. 5, sec. 3. Laws shall be

passed taxing, by uniform rule, all moneys, credits, in-

vestments in bonds, stocks, joint stock companies, or

MORTGAGE TAXATION 47

otherwise ; and also all real and personal property, ac- cording to its true value in money.

Present Law. Laws, 1907, c. 258, sees. 14, 32.

Mortgages are taxable as personal property.

North Dakota

Constitution, 1889, sec. 176. Laws shall be passed taxing by uniform rule all property according to its true value in money.

Present Law. Rev. Codes, 1905. Mortgages are taxable as personal property in North Dakota. Both real and personal property are taxable (sec. 1481) and credits are defined to include all claims and demands secured by deeds or mortgages, due or to become due (sec. 1480). The amount of credits is an item in- cluded in the list which the tax payer is required to make out (sec. 1496).

Ohio

Constitution, 1851, art. 12, sec. 2. Laws shall be passed taxing by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also all real and personal property according to its true value in money.

Present Law. Ann. St., 1906. Mortgages in Ohio are subject to taxation as personal prop- erty. Both real and personal property is taxable (sec. 2731) and tax payers are required to list all money loaned on pledge or mortgage of real estate, although a deed or other instrument may have been given, if the deed or other instrument is considered merely as security (sec. 2734).

If any person required to list property fails to do so or only returns a portion of his taxable property, the county auditor must ascertain as near as practic- able the true value of the property that ought to have been listed for a period not exceeding five years next preceding the year in which the inquiries and correc- tions were made. The amount for each year is multi- plied by the tax rate for that year and the owner taxed for the whole amount (sec. 2781a). A penalty of fifty per cent was added for omitted property (sec. 2781). The court held that that part of the law was invalid but maintained that it could be disregarded without affecting the validity of the statute in other respects (Gager Treas. v. Prout, et al., 48 O. S. 89, 1891).

Oklahoma J

Constitution, 1907, art. 10, sec. 5. The power of taxation shall never be surrendered, suspended, or con- tracted away. Taxes shall be uniform upon the same class of subjects.

Oregon

History. In 1882 a law was passed (p. 64) provid-

ing that the mortgage and the mortgage debt were, for

the purposes of assessment and taxation, to be treated

as land cr real property ; both the mortgage and the

debt were to be assessed and taxed to the mortgagee

1 1908 Laws not yet obtainable.

in the county, city, or district, in which the land or real property given . as security was situated. This law applied only to mortgages secured by property lo- cated within a single county, and not to mortgages secured by property partly within and partly without the county. All such mortgages were to be void.

A mortgage lawfully made was to be considered as an indebtedness and the mortgagor was entitled to the same deduction from his assessment as other debtors.

The circuit court of Oregon declared the law uncon- stitutional in the case of Dundee, etc. Co. v. School District (10 Sawyer 52, 1884). The court maintained that an act which provided for the taxation of mort- gages on land in no more than one county, there be- ing mortgages on land in more than one county was void for want of’uniformity required by sec. 1 of art. 9 of the constitution of the state. This law was amended (Laws, 1885, p. 9), so that mortgages issued by railroad corporations were to be legal, even if the land given as security was situated in more than one county. Later (Laws, 1889, p. 30) this same pro- vision was made applicable to mortgages given by cor- porations manufacturing iron or steel or working any iron, go d or silver mines.

During 1893 session of the legislature (Laws, 1893, p. 6) the entire mortgage tax law was repealed and no deduction of indebtedness from assessment was to be allowed in any case.

Many interesting cases have arisen under the law of 1882. In one case (Munford v. Sewell, 11 Ore- gon 67, 1883) the court held that the state had power to tax a mortgage as such, in the county where re- corded, irrespective of the residence of the owner of the mortgage, and that all law taxing mortgages owned by non-residents did not impair the obligation of con- tracts, whether the mortgage contracts were made be- fore or after the passage of the law. The court main- tained that the security could not be enforced in any other jurisdiction and that the question was wholly one of power, and, since the power of the state over the mortgage was as exclusive and complete as over the land mortgaged, the mortgage was subject to taxation by the state, unless there was a constitutional limita- tion to the contrary.

In the case of Savings and Loan Society v. Mult- nomah county (169 U. S. 421, 1898) the supreme court of the United States held that the statute of Oregon of 1882 taxing mortgages on land in that state to the mortgagees in the counties where the land lay, did not, as applied to mortgages owned by citizens of other states and in their possession outside of the state of Oregon, contravene the fourteenth amendment of the constitution of the United States. The court fur- ther held that the result of the law was that nothing was taxed but the real estate mortgaged, the interest of the mortgagee therein being taxed to him, and the rest to the mortgagor.

Constitution, 1859, art. 9, sec. 1. The legislative as- sembly shall provide by law for uniform and eqr rate of assessment and taxation ; and shall prescribe such regulations as shall secure a just valuation for taxation of all property, both real and personal, (ex- cepting such only as may be especially exempted by law).

Present Lazv. Laws, 1907, c. 268. In Oregon at the present time mortgages are taxable as personal property (sec. 1, 3).

Taxes shall be levied and collected by general laws and for public purposes only

Montana

Constitution, 1889, art. 12, sec. 2. 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.

Present Law. St. 1895. In Montana mortgages are taxable as personal property. The term “credits” is defined to mean those solvent debts, secured and unsecured, owing to a person (sec. 3680, 6^th.). The assessor must require a statement under oath from each person; this statement to contain a list of all mortgages held by them (sec. 3701.). As an aid in the work of assessment the county clerk is required to transmit annually to the assessor a complete abstract of all unsatisfied mortgages, deeds of trust, contracts, and other obligations, by which any debt is secured.

If the property given as security is located in more

than one county, it is the duty of the assessor to trans-

mit such information to the state board of Equaliza-

tion. The board then fixes the proportional value to

be assessed in each county. Similar difficulties arising

Nebraska

Constitution, 1875, art. 9, sec. 1. The legislature shall provide such revenue as may be needful, by levying” a tax by valuation, so that every person and corporation shall pay a tax in proportion to the value of his, her, or its, property and franchises.

Present Law. Ann. St., 1903. In Nebraska mortgages are taxable as personal property. Prop- erty owners are required to list all moneys vested or loaned by them, either as principal or agent, (sec. 10427). In Nebraska according to law, the actual value of the taxable property is ascertained, but it is only assessed at 20 per cent of such valuation (sec. 10411).

It is the duty of the register of deeds, county clerk, county judge, clerk of the district court, and all other county officers, to assist the county assessor in the examination of the records of their respective offices, and to give to the county assessor any information in their possession that will assist him in his work of assessment (sec. 10513).

Nevada

Constitution, 1864, art. 10, sec. 1. The legislature shall provide by law for a uniform and equal rate of assessment and taxation.

Present Lazv. Comp. Laws, 1900. In Nevada mortgages are taxable as personal property. The term “personal property” includes all moneys at in- terest secured by mortgage or otherwise (sec. 1082). Court Decisions. The court has held that a debt secured by mortgage is subject to taxation, although the mortgagee is indebted to an amount equal to or exceeding the amount of his mortgage; (Drexler v. Tyrrell, 15 Nev. 114, 1880) and that the legislature under the constitution, cannot exempt money at in- terest secured by mortgage (State v. Carson Sav- ings Bank, 1882, 17 Nev. 146).

New Hampshire

Constitution, 1792 as amended 1902. Part second, art. 6. The Public Charges of Government or any part the~e”cf may be raised by taxation upon polls, estates, and other classes of property, including fran- chises and property when passing by will or inherit- ance.

Present Law. St. 1901, title 9, c. 55, sec. 7. In New Hampshire mortgages are taxable as personal property. Personal property liable to taxation in- cludes money on hand or at interest more than the owner pays interest for, money loaned on any mort- gage, pledge, obligation, note, or other security, whether on interest or interest to be paid or received in advance.

New Jersey

History. In New Jersey, legislation relating to mortgage taxation began as early as 1868. All mort- gages on real and personal property within Passaic, Morris, Hudson, Union and Essex counties, and within the city of New Brunswick were to be exempt from taxation in the hands of any inhabitant of the state (c. 382). It would seem that mortgages in the other counties were to be taxed and that real and per- sonal property was to be assessed at its full and fair value without any deduction for mortgages (c. 523).

The next year (1869) a law was passed (c. 511) providing that all mortgages upon real estate, chattels or personal property taxable by law in Hudson, Union, and Essex counties, in the county of Passiac, except the townships of West-Midford, Pompton and Wayne, and in the city of New Brunswick, were to be exempt from taxation when held by any inhabitant, corpora- tion or association residing or located in the counties .or cities enumerated, but were not to be exempt when held by any inhabitant, corporation, or association re- siding or located in any other county or place in the state.

In 1876 it was made lawful for the owners of lands situated in the counties of Hudson, Essex, Union, Ber- gen, and Passaic, and the cities of Trenton, New Brunswick, and Camden, to agree with the holders of any mortgage then in existence or thereafter made not to apply for any deduction from the taxable value of the lands given as security because of any mort- gage (c. 121, sec. 1). In cases where agreements had been entered into and broken, the mortgage was to be- come due and payable and the amount which the mort- gagee paid in taxes was to be added to the principal of the debt with interest (c. 121, sec. 2).

In the same year a general law was passed (Laws, 1876, c. 122) stating that no mortgage was to be as- sessed for taxation unless a deduction has been claimed by the owner of the land and allowed by the assessor. If the mortgage was separately assessed, it was to be taxed in the township or city where the mortgaged land was situated.

A similiar law, more definite and more carefully drawn, was passed in 1893, the main provisions of which were as follows : that no mortgage on real or personal property, or both, whether given by individ- uals or corporations, or the debt secured by such mortgages, was to be assessed for taxation unless a deduction had been claimed by the owner of the mort- gaged property and allowed by the assessor (c. 283). This law was repealed in 1903 (c. 209) and another law enacted (c. 208, sec. 10). The law as passed in 1903 was amended in 1904 and again in 1905 (Laws, 1904, c. 112, sec. 10; 1905, c. 161) and is now the present law of the state.

Constitution, 1844, art. 4, sec. 7, par. 12. Property shall be assessed for taxes under general laws, and by uniform rules, according to its true value.

Present Law. Laws, 1903, c. 208, sec. 10, as amended by Laws, 1904, c. 112 and Laws, 1905, c. 161. No mortgage or debt secured by mortgage on real property which is taxed in the state is to be listed for taxation, and no deduction from the assessed value of the real property is to be made by the assessor on account of any mortgage debt, but instead the mort- gagor is entitled to credit on the interest payable on the mortgage for as much of the tax as is equal to the tax rate applied to the amount due on the mort- gage. Exception is made to this rule where the par- ties have otherwise agreed, or where the mortgage is an investment of funds not subject to taxation, or where the parties have lawfully agreed that no deduc- tions shall be made from the taxable value of the lands by reason of the mortgage. Mortgages and debts secured by mortgages on property exempt from taxation are also to be exempt.

The legislature shall provide a uniform rule of taxation, except on property paying specific taxes

Michigan

Constitution, 1850, art. 14, sec. 11. The legislature shall provide a uniform rule of taxation, except on property paying specific taxes, and taxes shall be levied on such property as shall be prescribed by law.

Present Law. Complied Laws, 1897. In Michigan mortgages are taxab’e as personal property, (sec. 3824, 3831)

Minnesota

Constitution, art. 9, sec. 1. The power of taxation shall never be surrendered, suspended, or contracted away. Taxes shall be uniform upon the same class of subjects, and shall be levied and collected for public purposes. (Amendment passed in 1906)

Present Lam’. Laws, 1907, c. 328. In Minnesota mortgages are subject to a registration tax of fifty cents on the one hundred dollars, or major fraction thereof. A mortgage is defined as any instrument creating or evidencing a lien of any kind on real property, real estate, or land, given or taken as se- curity for a debt, even though such debt may also be secured in part by a lien upon personalty. An execu- tory contract for the sale of land is also treated as a mortgage, the unpaid balance to be considered as the face value. The law does not apply to correction mortgages, mortgages taken in good faith by persons or corporations whose personal property is expressly exempt from taxation by law, or to mortgages of per- sons or corporatioins whose property is taxed upon the basis of gross earnings, or other method of commuta- tion in lieu of all other taxes.

The tax imposed amounts to fifty cents on each one hundred dollars, or major fraction thereof, of the principal debt or obligation secured by real property situated within the state.

If the real estate given as security is situated partly within and partly without the state, the tax imposed by the state of Minnesota is in the proportion that the value of the real estate within the state bears to the value of the entire property given as security, and if the real property given as security is situated in more than one county of the state, the entire tax is first paid in the county where the mortgage is presented for record, and then this amount is divided between or among the counties in the same ratio as the assessed value of the real property covered by the mortgage in each county bears to the assessed value of all the property described in the mortgage. In the case of a mortgage given in trust, to secure the payment of bonds or other obligations to be issued, a statement may be incorporated, showing the amount already is- sued or to be issued forthwith. The tax is computed upon this amount and no obligations issued in excess of this aggregate are to be valid for any purpose unless the additional tax is paid and the receipt properly en- dorsed.

All mortgages together with the debts or obligations secured and the papers evidencing such debts, are to be exempt from all other taxes if the provisions of this law have been complied with, but the payment of this tax does not exempt such property from the opera- tions of the law relating to the taxation of gifts and inheritances, or those governing the taxation of banks, savings banks, or trust companies.

The tax imposed by this act is paid to the treasurer of the county in which the mortgaged land or some part of it, is situated. A receipt showing that the tax has been paid is endorsed on the mortgage by the treasurer, is countersigned by the county auditor and then the mortgage together with the receipt is re- corded by the register of deeds. Neither the mort- gage, papers relating to its foreclosure, nor any as- signments or satisfaction is to be registered, unless the tax has been paid, and in addition to this, neither the mortgage nor any record of it is to be received as evidence in any court or to have any validity as no- tice unless the provisions of this act have been com- plied with.

All mortgages recorded prior to April 30, 1907, may become taxable under the provisions of this law if the owner pays the tax upon the amount of the debt se- cured and obtains the treasurer’s receipt showing that the payment has been made. This receipt is then re- corded on -the margin of the mortgage record.

36 MORTGAGE TAXATION

The taxes paid to the county treasurers are to be apportioned and distributed in the same manner as the real estate taxes paid upon the real estate described in the mortgage.

Mississippi

Constitution, 1890, sec. 112. Property shall be as- sessed for taxes under general laws and by uniform rules according to its true value.

Present Law. Code, 1906, sees. 4258, 4266. Mort- gages in Mississippi are taxable as personal property. Money loaned at interest either within or without the state, is to be assessed and taxed to the owner at his place of residence.

Missouri

History. A joint resolution was drawn up in 1899 (Laws, 1899, p. 383) providing for an amendment to the constitution whereby mortgages and mortgaged property were to be taxable under a law very similar to the California law of 1879. This amendment was adopted by the people in 1900 (Laws 1905, p. 315). In a case arising under the law the court held that this amendment so discriminated between corporations and persons a corporation being for the purpose of taxa- tion a “person” within the fourteenth amendment as to deny to railroads and other quasi public corpora- tions “the equal protection of the law,” in that it re- quired the value of farm lands to be lessened, for taxation purposes, by the value of such security, but did not permit the value of the property of such cor- porations to be decreased by the value of their bonded and other indebtedness. The constitutional provision was held unconstitutional. (Russell v. Croy, 164 Mo. 69, 1901)

A California case involving the same question was declared constitutional (C. P. R. R. Co. v. Board of Equalization, 60 Cal. 35, 1882), and unfortunately when a group of similar California cases were carried to the Supreme court of the United States they were decided upon other grounds. (118 U. S. 394. See also 18 Fed. Rep. 385.) After the law was declared unconstitutional in Missouri a joint resolution was passed in 1901 to repeal it (Laws 1901, p. 261), and it was repealed by a vote of the people in 1902 (Laws 1905, p. 317).

Constitution, 1875, art. 10, sec. 3. Taxes may be levied and collected for public purposes only, they shall be uniform upon the same class of subjects with- in the territorial limits of the authority levying the tax, and all taxes shall be levied and collected by gen- eral laws. sec. 4. All property subject to taxation shall be taxed in proportion to its value.

Present Law. Ann. St. 1906. In Missouri at the present time mortgages are taxable as personal prop- erty. The term “credits” is defined to include all money loaned and all indebtedness by deed, contract, mortgage or pledge of property of whatsoever kind, (sec. 9123), and the list of every taxable person must contain an aggregate statement of all solvent notes secured by mortgage or deed of trust (sec. 9144).

The county recorders are required to keep a mort- gage list with such information as may be necessary to enable the assessor to place all mortgages on the assessment rolls (sec. 9173).

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)