positive facts. There would be no difficulty were it not that the person may live in one state and hold his property in another. The opportunity is thereby created for the state which has jurisdiction over the person to exercise compulsion in order to obtain the property. Of course such attempts may conceivably fail, demonstrating the real lack of power. But, apart from the question of power, the end of the state is justice, and there can be little doubt that as to those forms of property which are incontestably without the state, the most enlightened opinion is opposed to taxing them. This has been said to be "the only upright course." "The practice of taxing property outside of the territory and jurisdiction of a state merely because the owner is a citizen or resident of the state, rests upon identically the same principle as that which constitutes the basis of brigandage, namely that the control of the person of the victim confers the right to a revenue consisting of a percentage of the value of all the victim's property of every description and wherever situated."" Good authority doubtless exists for the other view; but this much is evident, that no solution of the problem of double taxation will ever be made on such a basis. If the avoidance of double taxation be of sufficient importance to determine the question, then the country of actual situs should, without doubt, be awarded the power of taxation. The taxation of property abroad, held by a resident, may be justified, however, on grounds of expediency, or speaking more precisely, of financial advantage. Thus has the policy of Massachusetts been upheld. Under what theory is this justified?

There are two chief theories respecting the basis of taxation

1 Seligman, Taxation of Corp., op. cit., 650.

2

Report of the New York Tax Commission, 1872, p. 22.

3 Cf. Bastable, Public Finance, p. 304.

Cf. Seligman, Taxation of Corp., op. cit., pp. 647-8.

5 Mass. Tax Report, 1875, pp. 106–7.

-the "personal obligation" theory and the "protection" theory. The protection theory is the classic one of political economy, but of late years it has become more and more discredited.' It still occupies a prominent place, however, in our judicial decisions. It was a great exaggeration, therefore, the assertion of Mr. Wells, that "taxation implies protection. It is held by every authority to be the equivalent for the protection which the government affords to the property of its citizens."* The "protection" theory made the payment of taxes a payment for value received, in the protection of the person or the property of the taxpayer. But no civilized system of taxation ever regulated the rate of its assessments on this basis. The protection theory may claim to have more plausibility in another way, i. e., the fixing of the proper place of taxation. The protection of property shows the virtual relation of the state thereto. But the difficulty is that this is also applied to persons. "The old protection theory would say that the country of residence should be paid for guarding the person, and that where the property lies for watching over it." The defect of the doctrine, as applied, consisted in the fact that it was often used to maintain the liability of the resident for all the property he possessed at home or abroad, and to justify the taxation of the non-resident on his property lying in its borders. The "personal" theory demands that taxation should be rated according to the ability of the tax-payer, because it is his duty to pay what he can, equally with his fellow-citizens; of course, this payment is due to the state of which he is a member. This is an elevated idea, and it is certainly a relatively true basis for the rating of taxes, as long as the citizen's property is within the state. But, if a part of the sources of his income be from property abroad, then a modification must be made in

1 Cossa, Taxation, p. 54.

2 N. Y. Tax Commission Report, 1872.

3 Bastable, Public Finance, p. 304.

the theory, or the tax-payer will be subjected to double taxation, because even the extreme personal view would never be carried so far as to demand the exemption from taxation of non-resident lands. The Massachusetts Tax Commission of 1875 held that the basis of taxation was social necessity,' and that it should be levied according to ability, extending this even to extra-territorial property.2

The personal theory has been upheld by most modern writers. It is said that "we must disabuse ourselves of the idea that property, as such, owes any duty to pay taxes. The State has direct relations not with property but with persons."" Of course, it is evidently true that property, as inanimate mat· ter, has no moral duty; but the state certainly has relations with property in many ways, and in taxation as well as others. Those who claim the necessity of a personal view in regard to taxes would often be among the first to demand some adjustment between conflicting jurisdictions, and would not be disposed to agree to the exemption of the tangible property of non-residents within the state. When the state exacts a tax

from the land, it deems it immaterial who the owner is. The non-resident landowner is not taxed, because he has personal or political relations with the community; he pays the tax because it is assessed on the land.*

considered from a legal Taxation, however, as a upon the attitude of the

The subject of jurisdiction, when point of view, is full of difficulties. practical problem, depends so much law and the necessary legal limitations, that a general and brief

1 Mass. Tax Report, 1875, p. 10.

2 Ibid., p. 105.

3 Seligman, The General Property Tax, op. cit., p. 56. "An die Spitze stellen wir den Satz, dass die Steuerpflicht stets eine persönliche ist; sie wendet sich immer an Personen; gegenüber einem Objekt oder einer Sache kann keine Pflicht geltend gemacht werden."-Schanz, Finanz-Archiv., 1892, ii, s. 3.

In the recent legal developments, this view in regard to land taxes is illus trated by the abandonment of the formal method of assessment to owners, whether known or unknown, and the substitution of the method of taxation in rem.

consideration of the same is necessary. The general statement is that the force of the law of a state is absolute within the confines of its territory, as to persons resident therein or to property situated in it; on the other hand, it is of no validity as against persons resident without its borders or to property lying in another state.' "(1) Every state is entitled to demand that its own laws only shall be recognized within its bounds. (2) No state can require the recognition of its laws beyond its bounds. I will not only admit the truth of these propositions, but even allow their extension to the utmost conceivable limits." The assertion of jurisdiction over all persons within the territory, by any state, necessarily involves a denial of the jurisdiction of any other state. The rule applies in a broad sense to every person, of no matter what nationality or citizenship, who may sojourn there, though international law recognizes the actual interest that a foreign state may take in its citizens abroad, and for mutual convenience may allow modifications of the rule; but this depends upon convention or comity. Apart from this, however, no authority of a foreign state is recognized. Personal statutes may be enforced against a citizen after he returns to his country, but not while abroad. The degree to which the jurisdiction over the person may be exercised, to control his property abroad, is disputed. Of course it can be enforced only through the person, by duress, etc.; and the decrees of a court, in that case, would have no standing in the courts of any other country, least of all in the country where the property was actually situated.*

As to property, "the laws of the place where such property is situated, exclusively govern in respect to the rights of the parties." This may be stated as universal; the divergence lies

1 Story, Conflict of Laws, § 539.

Savigny, Conflict of Laws, Guthrie's translation, Edinburgh, p. 26.

3 Story, Conflict of Laws, SS 540, 541.

1

however in the interpretation of the law of situs. There are, in this respect, two kinds of property distinguished—immovable and movable. As to the former, jurisdiction follows situs invariably; "every attempt of any foreign tribunal to found a jurisdiction over it must, from the very nature of the case, be utterly nugatory, and its decree must be forever incapable of execution in rem.' The term immovable is subject to legal interpretation. The law recognizes not only land and the physical fixtures attached thereto, but also real rights following the land such as "servitudes and easements, and other charges on lands, as mortgages and rents, and trust estates."" This is merely the extent of the general doctrine of jurisprudence. The local law may modify it so that" all other things, though movable in their nature, which by the local law are deemed immovables, are in like manner governed by the local law. In other words, in order to ascertain what is immovable or real property, we must resort to the lex loci rei sitae." Of course the local law may, contrariwise, declare things naturally immovable to be movable. It is in the theory of movables that we find the greatest divergence. Movables themselves are properly subdivided into tangible and intangible personalty; for many purposes it will be found that the law as respects tangible personalty is much nearer that controlling realty than to intangible personalty. This is on account of the practical difference of actual and constructive situs. For certain general purposes of the private law of property, e. g., transfer, alienation, disposition, etc., the prevailing doctrine is that personalty has its situs at the residence of the owner; in other words, personal property has for these purposes no independent locality. There are some limitations on this: first, in the nature of

1 Story, Conflict of Laws, § 551.

2 Ibid., § 447.

3 Ibid., § 447.

Cf., e. g., Ill. R. S., 1891, ch. 120, §§ 14, 15, gas mains, street railways, bridges. 5 Story, Conflict of Laws, § 376.