proceedings.(a) PART II. PROPERTY. So, when the object of the notice is to invite and enable the person served to assert a claim to movables within the jurisdiction, service has been allowed even as against CAP. VII. a foreign Sovereign.(b) Morables The jurisdiction in respect of movables within the territory, Jurisdiction. however, clearly exists; and may be exemplified, not only by the retention of Order XI. r. 1 (d), above cited, but by other illustrations. The whole procedure of the Court in Admiralty matters, in rem, to enforce maritime liens (statutory or common law) is a strong assertion of such jurisdiction. The law of distress is a still more familiar instance. No one could doubt that the goods of a foreigner, though he be abroad, are subject while in England to the English landlord and tenant law. Cases in which the Court (except in Admiralty matters) has assumed to control movables simply on the ground of their being within the territory are comparatively unusual; but an injunction was granted against the removal of a ship which had been sold in Hamburg by a foreigner to an Englishman, and afterwards brought into an English port.(c) So in another case, where £20,000 in bonds was deposited in the Bank of England in trust for a foreign Government, on such terms that the foreign Government could by its ambassador have withdrawn the deposit but for the intervention of the Court, the Bank was restrained from parting with the deposit until the rights of the parties under contract had been ascertained.(d) In cases of interpleader, orders for service out of the jurisdiction of an interpleader summons have more than once been made.(e) Of these decisions Cotton, L.J., says they may "perhaps be supported on the ground that the object of service was not to give jurisdiction over the party served, but only to give him notice of a proceeding affecting his rights, that he might if he pleased come in and defend them."(f) But it is plain that notice of interpleader proceedings asserts an absolute right in the tribunal which gives it to deal as it chooses with the movable personalty to which the interpleader summons relates. Inter (a) Re Nathan, Newman & Co.. 35 Ch. D. 1 ; Credits Gerundeuse v. Van Weyde, 2 Q. B. D. 171; Re Haney's Trusts, 10 Ch. 275; Re Bonelli, 18 Eq. 655; Colls v. Robins, 55 L. T. Rep. N. S. 479. (b) See per Jessel, M.R., and James, L.J., in Stronsberg v. Costa Rica, 29 W. R. 125. (c) Hart v. Herwig, 8 Ch. 860. In this case a bill for specific performance was also entertained, and substituted service directed on the master; but quære if this would now be done. (d) Gladstone v. Musurus Bey, 1 H. & M. 495; see this case discussed in Smith v. Weguelin, 8 Eq. 214, 215. (e) Credits Gerundeuse v. Van Weyde, 12 Q. B. D. 171; Van der Kan v. Ashworth, W. N. 1884, 58. (f) Per Cotton, L.J., in In re Busfield, 32 Ch. D. 123, 132. PROPERTY. PART II. pleader proceedings with respect to movables out of the jurisdiction would obviously be impossible unless the person who CAP. VII. had actual control and possession of the movables in dispute Morables came in and submitted to the English jurisdiction. It is an Jurisdiction. indispensable condition of relief by interpleader proceedings that Interpleader the person who is threatened or vexed with a double claim orders ser- should be willing "to pay or transfer the subject-matter into vice abroad. Taxationliability to income tax. court, or to dispose of it as the Court or a judge may direct."(a) And leave has been given to serve petitions abroad to obtain payment out of court, a somewhat analogous case of dealing with movables on the ground of their actual situation.(b) Except, however, for the purpose of dealing with property within the jurisdiction, a suit between foreigners will not be entertained, even if service is effected and appearance entered without objection.(c) Leave has been granted to serve notice of a writ abroad where an injunction was sought affecting funds in England, under Order XI. r. I (f). It was, however, held on appeal that, as a matter of discretion, such leave should not be given unless there is a probable cause of action, though the claim may be within the words of the rule. (d) Where the sole respondent to a petition for the revocation of a patent was a domiciled Scotchman resident in Scotland, though there could be no service of the petition abroad, yet the Court ordered the petition to be set down for trial unless the respondent should come in and show cause to the contrary, being satisfied that he had in fact ample notice.(e) The liability of movable personal estate to taxation is not, strictly speaking, within the scope of the present treatise; but it may be convenient to summarise here the English law as to the application of the income tax to foreigners in respect of their annual gains or profits, as well as to Englishmen making profits abroad. Under schedule D. of 16 & 17 Vict. c. 34, s. 1, income tax is chargeable "for and in respect of the annual profits or gains arising or accruing to any person residing in the United Kingdom from any kind of property whatever, whether situate in the United Kingdom or elsewhere; and for and in respect of the annual profits or gains arising or accru (a) Judicature Rules, 1883, Order LVII. r. 2 (c). (b) Colls v. Robins, 55 L. T. Rep. N. S. 479; Re Turner, 32 Sol. Journ. 324. (c) Matthæi v. Galitzin, L. R. 18 Eq. 347. It should be noted, however, that the decision in this case related to the profits arising from foreign land, and that no question as to movables arose. (d) Société Générale de Paris v. Dreyfus, 37 Ch. D. 215. I Times Law Rep. 622. (e) Re Drummond, 43 Ch. D. 80. Cf. Call v. Oppenheim, PART II. PROPERTY. Movables ing (a) to any person residing in the United Kingdom from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in the United Kingdom or else- CAP. VII. where. . . . . And for and in respect of the annual profits or gains arising or accruing to any person whatever, whether a Jurisdiction. subject of her Majesty or not, although not resident within the United Kingdom, from any property whatever in the United Kingdom, or any profession, trade, employment, or vocation exercised within the United Kingdom." Under these words income tax is charged on (a) Persons residing within the United Kingdom, on property wherever situate and business wherever carried on (so far as profits received here are concerned); (b) Persons not residing within the United Kingdom, on property situate or business carried on within the United Kingdom. The meaning of the word "residence," for the purpose of "Residence" the Income Tax Acts, so far as ordinary individuals are con--what it is. cerned, is defined by sect. 39 of 5 & 6 Vict. c. 35. "Any subject of her Majesty whose ordinary residence shall have been in Great Britain, and who shall have departed from Great Britain and gone into any part beyond the seas for the purpose only of occasional residence, at the time of the execution of this Act, shall be deemed, notwithstanding such temporary absence, a person chargeable to the duties granted by this Act as a person actually residing in Great Britain. . . . Provided always, that no person who shall on or after the passing of this Act actually be in Great Britain for some temporary purpose only, and who shall not actually have resided in Great Britain at one time or several times for a period equal in the whole to six months in any one year shall be charged with the said duties mentioned in schedule D. as a person residing in Great Britain; but nevertheless every such person shall, after such residence in Great Britain for such space of time as aforesaid, be chargeable to the said duties for the year commencing on the sixth of April preceding. Provided also, that any person who shall depart from Great Britain after claiming such exemption, and shall again return to Great Britain on or before the fifth day of April next after such claim made, shall be chargeable to the said duties as a person residing in Great Britain for the whole of the year in which such claim shall have been made." It will be seen that under this section British subjects who have gone abroad for occasional residence, are deemed con (a) But this does not extend to profits and gains arising from a business wholly carried on abroad which are not in fact remitted to or received by the owner resident in England: Colquhoun v. Brooks, 14 App. Cas. 493, infrà, p. 249. PART II. PROPERTY. CAP. VII. MorablesJurisdiction. Interest or dividends from foreign companies. structively resident in the United Kingdom. With respect to persons not ordinarily resident in the United Kingdom (whether or not of British nationality) it is provided that temporary presence in the United Kingdom shall not render them liable to income tax, unless they have resided within the United Kingdom for at least six months (in all) of the year for which they are charged. Residence under this section is a question of fact. It has nothing to do with domicil,(a) and must be determined on the circumstances of each case.(b) With respect to the residence of corporations, this is decided by analogy to the residence of individuals. Registration and incorporation in England is a strong circumstance, to be considered with all the others. Where the head office is also in England, at which the directors meet, and from which all the business of the company is controlled, residence in England is the necessary inference. (c) But the mere transaction of business and the maintenance of an agency, within the jurisdiction, does not (at any rate in the case of a corporation constituted under foreign law) amount to residence.(d) With respect to interest or dividends from foreign States or companies received in the United Kingdom for distribution here, it is provided by 5 & 6 Vict. c. 80, s. 2 (as to foreign States), and by 16 & 17 Vict. c. 34, s. 10 (as to foreign companies), that all persons entrusted with their distribution shall render an account thereof to the Inland Revenue, for the purposes of taxation. It is assumed for this purpose that all dividends so distributed in England are distributed amongst persons resident in England, in the sense already explained. But of course a person resident abroad may, as a matter of convenience, receive his dividends through London agents or trustees, in which case he will not be liable to taxation in respect of moneys so received.(e) And where the dividends of a foreign company so received in England consisted in part of moneys arising from profits or gains made in England, on which (a) Attorney-General v. Coote, 4 Price 183; Walcot v. Botfield, Kay, 534. (b) See for illustrations Lloyd v. Inland Rer. 21 L. R. Sc. 482; Young v. Inland Rev., 12 L. R. Sc. 602; Rogers v. Inland Rer. 16 L. R. Sc. 682; Barlow v. Smith (1892), 9 T. L. R. 57. (c) Cesena Sulphur Co. v. Nicholson, Calcutta Jute Mills v. Same (1876), 1 Ex. D. 428. On the question of what amounts to residence, these cases appear not to be interfered with by Colquhoun v. Brooks, 14 A. C. 493. See on this subject ante, p. 139. (d) Attorney-General v. Alexander (1874), L. R. 10, Ex. 20. income tax had been already charged as such, it was held that such dividends ought to be assessed with respect to that portion only which represented profits arising out of the United Kingdom.(a) Otherwise, income tax would be paid on the PART II. PROPERTY. CAP. VII. Morables Jurisdiction. exercised. other portion twice over. The question where a particular trade or business is exercised Trade where wholly or partially is also one of fact. In the case of an English company working a railway in Brazil; from a London office by London directors, it was held that the business was at any rate not wholly carried on in Brazil; and Halsbury, C., was disposed to think that the trade, if the word were strictly construed, was wholly carried on in England.(b) But where an English company owned most (but not all) of the shares in a foreign company, which gave it preponderating influence in the control, it was held that as the remaining shares were held by independent persons abroad, the foreign company was not the agent of the English company, and the business carried on by the foreign company abroad was not business carried on by the English company.(c) And the case last cited seems to show that it makes no difference that the foreign company was formed only to comply with the foreign law, provided all the shares are not owned by the English company. Where a firm established at New York had a branch establishment here for purchases of goods for exportation to America, where they were sold, and where all the profits were made, it was held that there was no business in England liable to income tax.(d) There certainly appears some difficulty in reconciling the decision last cited with the language of Lord Esher, M.R., in Erichsen v. Last (infrà). "Wherever profitable contracts are habitually made in England by or for foreigners with persons in England, to do something for or supply something to those persons, such foreigners are exercising a profitable trade in England, even though everything to be done by them in order to fulfil the contracts is done abroad." But where a foreign firm of wine (a) Gilbertson v. Fergusson, 7 Q. B. D. 562. That is, if P= total profits of company, p=profits made in England, and D= dividend distributed in England, then the assessment ought not to be on the whole of D, but upon P - P D, or D - ED. Р (b) San Paulo Ry. Co. v. Carter (1896), A. C. 31. This is inconsistent with, and apparently overrules, the language of Wright, J., in Bartholomay Brewing Co. v. Wyatt (1893), 2 Q. B. 499, attributing the locality of the business to the place where the profit-earning operations are carried on. (c) Kodak Ltd. v. Clark (1903), 1 K. B. 505; cf. Bartholomay Co. v. Wyatt (1893), 2 Q. B. 499. (d) Sulley v. Attorney-General, 5 H. & N. 711; 29 L. J. Ex. 464. |