The Constitution does not prohibit a state from including in the
taxable property of her citizens so much of the registered public
debt of another state as they respectively hold, although the
debtor state may exempt it from taxation or actually tax it.
Mrs. Elizabeth Patterson, a resident of Baltimore, Md.,
returned, in accordance with the law of that state, to the proper
board of assessors, the following property: City of New York stock,
six percent; City of New York stock, seven percent; County of New
York stock, seven percent; County of New York stock, six percent;
State of New York stock, six percent; State of Pennsylvania stock,
six percent; State of Ohio stock, six percent; and City of
Philadelphia stock, six percent. She stated their several amounts
and claimed their exemption from taxation because they were of a
public character and, except a portion of the City of Philadelphia
stock, were exempt from taxation by the laws of the states
respectively authorizing their issue, while that portion had always
been subjected by Pennsylvania to a tax which she had paid to that
state. They were of the character known as "registered" --
i.e., transferable only on the public record books of the
states and municipalities issuing them, and the interest was paid
only at places provided by the laws of those states, and beyond the
boundaries of Maryland. The board of control and review, by which
this return was revised, disallowed her claim for exemption. She
thereupon filed a petition in the Baltimore City Court, praying
that the above-described property should be stricken from the
lists. The order of the court granting the relief prayed was
reversed by the Court of Appeals, whereupon she sued out this writ
of error. She died during its pendency, and her executor was
substituted in her stead.
Page 104 U. S. 594
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
The question we are asked to decide in this case is whether the
registered public debt of one state, exempt from taxation by the
debtor state or actually taxed there, is taxable by another state
when owned by a resident of the latter state. We know of no
provision of the Constitution of the United States which prohibits
such taxation. It is conceded that no obligation of the contract of
the debtor state is impaired. The only agreement as to taxation was
that the debt should not be taxed by the state which created
it.
It is insisted, however, that the immunity asked for arises from
art. 4, sec. 1, of the Constitution, which provides that full faith
and credit shall be given in each state to the public acts of every
other state. We are enabled to give such an effect to this
provision. No state can legislate except with reference to its own
jurisdiction. One state cannot exempt property from taxation in
another. Each state is independent of all the others in this
particular. We are referred to no statute of the debtor state which
attempts to separate the situs of the debt from the person of the
owner, even if that is within the scope of the legislative power of
the state. The debt was registered, but that did not prevent it
from following the person of its owner. The debt still remained a
chose in action, with all the incidents which pertain to that
species of property. It was "movable" like other debts, and had
none of the attributes of "immovability." The owner may be
compelled to go to the debtor state to get what is owing
Page 104 U. S. 595
to him, but that does not affect his citizenship or his
domicile. The debtor state is in no respect his sovereign; neither
has it any of the attributes of sovereignty as to the debt it owes,
except such as belong to it as a debtor. All the obligations which
rest on the holder of the debt as a resident of the state in which
he dwells still remain, and as a member of society, he must
contribute his just share towards supporting the government whose
protection he claims and to whose control he has submitted
himself.
It is true, if a state could protect its securities from
taxation everywhere, it might succeed in borrowing money at reduced
interest; but inasmuch as it cannot secure such exemption outside
of its own jurisdiction, it is compelled to go into the market as a
borrower, subject to the same disabilities in this particular as
individuals. While the Constitution of the United States might have
been so framed as to afford relief against such a disability, it
has not been, and the states are left free to extend the comity
which is sought, or not, as they please.
Taxation of the debt within the debtor state does not change the
legal situs of the debt for any other purpose than that of the tax
which is imposed. Neither does exemption from taxation.
As the only federal question involved was decided right in the
court below, we cannot look into the other errors which have been
assigned.
Murdock v. City of
Memphis, 20 Wall. 590.
Judgment affirmed.
