St. John, Powers & Co. v. Mayor of Mobile , 21 Ala. 224 ( 1852 )

PHELAN, J.

— The only question to be determined is, whether the capital of a commercial firm in the city of Mobile, employed by them at that place in purchasing cotton upon commission, and in buying and selling bills of exchange, comes under the discription of personal estate in the city of Mobile, liable to taxation for city purposes, under the charter of 1844.

What is the capital of such a firm, proposing to conduct such a business, if we reduce it to its simplest form? It is that much cash, in gold or silver, ready at hand in the strong box, to be paid out for cotton purchased on commission, or in the purchase of a bill of exchange. It may be true, that we would rarely find in fact the capital, either of a bank or a house doing a commission and banking business, in this form, even in the commencement of their business. But whatever other form the capital may take, that is the only one it can be held to have in reality. It is the only one which will answer the purpose of capital under every exigency. If such capital takes the form of bank notes, what we commonly call paper money, the seller of cotton or of a bill of exchange may refuse to take such paper money in payment, and will be content with nothing but actual cash, gold and silver coin, made lawful tender by the laws of the land. Unless then, in such an exigency, the paper money can be readily converted into the actual cash, which it purports to represent, the firm will be without the capital with which to make purchases and conduct their business. Whatever form then the capital of such a firm may take, whether it be bank notés, or the notes and bills of individuals, or public securities, it is all, when regarded as capital, to be considered as actual cash, or reduced to the value of actual cash, in gold and silver coin.

To say then that a firm, such as that of the plaintiffs in error, engaged in the business described, have, on a given day, employed in their business, fifty thousand dollars "cash capital,” is to say that they have then, fifty thousand dollars in actual gold and silver or its equivalent.

If this be true, that the capital of a banking house is to be regarded as so much actual cash, or gold and silver coin, it necessarily follows, that such capital comes under the description of property; and if property, then personal property of course, or personal estate, for the terms are convertible.

The only question that remains to be considered is, whether it is personal property or estate in the city of Mobile; because that is the condition on which alone it is taxable under the charter.

What, in other words, is the locality of this property ?— this capital ? If, as the facts show, the plaintiffs in error reside in Mobile, have their office, their place of business in that city, can it with any show of reason be pretended that the locality of the fund on which the business is conducted, is not the same as the seat of the business, and the domicil of its owners? We must hold that they are the same. Portions of this fund — this capital, may be at points far distant, at New York or Liverpool for instance, in the shape of bills of exchange running to maturity and payable at those places, but by the regular course of business, these are only performing their appointed circuit, and will soon find their way back to the office in Mobile, ready to be sent forth again as the demands of business may require. The centre of all the operations is Mobile.

If one of the partners should go out of such a concern, and it had to be wound up by course of law, to what courts would the outgoing partner have to resort ? To the courts of Mobile. If one of the partners dies, or if all should die, to what point will the common fund have to be brought for distribution ? To the Probate Court of Mobile, the domicil of the decedents.

When, therefore, all the means and appliances for the employment of this capital, and its protection for the benefit of the owners while living, and for its management and distribution when they die, are found to have their locality in the city of Mobile, the capital itself may justly and properly be held to be taxable as personal property in the city of Mobile.

By way of strengthening this construction of the terms “ personal estate,” as they occur in tbe city charter of 1844, wc may remark, that tbe General Assembly of 1847, (Acts, p. 8,) in tbe revenue act of that session, define tbe terms real estate and personal estate, as connected with tbe subject of taxation, and under tbe terms “personal estate,” or “personal property,” (which they use as equivalents,) they include, among other things, all “ moneys and effects wherever they may be.” And in section 80, page 25, of the same act, they go on to levy a tax of one third of one per cent, “ upon the ‘ capital employed ’ in a regular exchange business.”

If we were left to construe the charter of 1844, without looking to this statute subsequently passed by the same legislature at all, we should not hesitate to say, that the cash capital of a house doing a commission and exchange business came fairly within the discription of personal estate, or personal property liable to taxation under that charter; but we nevertheless think it persuasive to show that such cash capital fell impliedly within the discription of personal estate, liable to taxation in 1844, that the same legislature expressly declared it to be such, in 1847.

Let the judgment be affirmed.