
    Rheinboldt v. Raine, Auditor, et al.
    
      Taxation — Vendee's absolute obligation for real estate — Vendor retains legal title — Sums due as purchase money taxable — Authority of auditor to place same on duplicate.
    
    A sum due the 'vendor of real estate from the vendee, as purchase money, to pay which the vendee has given an' absolute obligation, is a credit and taxable as such, notwithstanding the vendor has retained the legal title of the land sold as his security.
    Where sums due as such purchase money have been omitted from the tax return of the vendor, the county auditor is authorized to go back five years and place the same on the duplicate for taxation.
    (Decided December 11, 1894.)
    Error to the Circuit Court of Hamilton county.
    . The action was brought in the court of common pleas to enjoin the auditor of Hamilton county from placing certain additional valuations and taxes on the duplicate as a charge against the plaintiff, and to enjoin the county treasurer from collecting said additional taxes or any part thereof.
    By the record it appears that prior to April 17, 1877, the plaintiff, Rudolph Rheinboldt, was a partner in the brewing firm of John Kauffman & Co., Cincinnati, Ohio. The other members of the partnership were John Kauffman and Maria A., his wife. The property of the partnership consisted of a number of pieces of real estate situate in and about the city of Cincinnati, and personal property, consisting of horses, wagons, stock on hand, book accounts and other assets, belonging to the firm, the personal property being valued at about $111,370. Rheinboldt’s health failed, and desiring to retire, he entered into a contract with his partners as follows, to-wit:
    “Whereas, John Kauffman, Rudolph.Rheinboldt and Maria A. Kauffman are jointly interested in the property used in the business of John Kauffman & Co.;
    “And, whereas, the said Rudolph Rheinboldt is desirous of disposing of his interest in said business and of retiring from said firm;
    “Now, therefore, this agreement made and entered into this seventeenth day of April, A¿ D. 1877, between John Kauffman and Maria A. Kauffman, parties of the first part, and Rudolph Rheinboldt, party of the second part, witnesseth :
    “1. That the said Rudolph Rheinboldt, in consideration of the sum of one hundred and forty-five thousand ($145,000) dollars, which the said, parties of the first part agree to pay as follows,, to wit:
    ‘ ‘ 1. Ten thousand dollars cash.
    
      “2. Ten thousand dollars on the first day of August, 1878. •
    “3. Ten thousand dollars on the first day of August, of each and every year thereafter until said sum is fully paid, promises and agrees to convey and execute all proper deeds therefor when said sum of $145,000, with interest thereon, and as hereinafter stipulated, has been paid in full, all his right, title and interest in all the property both personal and real, now belonging to or connected with said business, to the parties of the first part, or either of whom as may by the parties of the first part be designated. And it is agreed that all deferred payments shall bear interest at six per cent per annum until paid, which interest, shall be paid annually, the first payment thereof to be on ' August 1, 1878, the deferred payments to bear interest from the date of this agreement, and that said parties of the first part are to pay all taxes and assessments on all of said property.
    “4. The said John Kauffman hereby agrees and assumes to pay all debts and liabilities of the firm of John Kauffman & Co., and to save the said Rudolph Rheinboldt harmless from the same.
    
      “5. It is further understood between the parties hereto that said Rudolph Rheinboldt does not part with any interest in the real estate of said partnership property until the aforesaid amount of one hundred and forty-five thousand dollars, with interest, is paid in full and deed executed for said property; it is also understood that said Rudolph Rheinboldt is not entitled to any revenue for said property whatsoever, either as rent or otherwise, during the continuance of this contract, except the principal and interest above provided for. ” .
    
      “6. It is hereby agreed that said Rudolph Rheinboldt consents to join in the sale of real estate belonging to John Kauffman & Co. not necessary for carrying on the brewing business. If said John Kauffman desires to sell the same, he, said Rudolph Rheinboldt, being entitled to receive one-half of the proceeds of sale, which shall be a credit upon said gross sum.
    “7. It is further agreed that the said Rudolph Rheinboldt will receive any sums of money before the same becomes düe, as above stipulated, and interest thereon shall then cease from that date; all moneys- paid said Rheinboldt shall be a charge upon the interest of said Rheinboldt in said business.
    “8. The said Maria A. Kauffman hereby charges all her separate estate with the payment of said sum of $145,000, and with the faithful performance of this agreement and the payment of all sums herein agreed to be paid.
    “In witness whereof, the parties have hereunto set their hands and seals in duplicate on the day and year aforesaid.
    [seal] “John Kauffman,
    [seal] Rudolph Rheinboldt,
    [seal] Maria A. Kauffman.
    “ Witnesses: A. E. Kramer,
    Emil Schmitt.”
    Under this contract, the Kauffmans paid to Rheinboldt various sums of money, so that there remained due said Rheinboldt as follows : On the day preceding the second Monday of March, 1883, $85,000; on the day preceding the second Monday of April, 1884, $75,000; on the day preceding the second Monday of April,' 1885, $65,000; on the day preceding the second Monday of April, 1886, $65,000; on the day preceding the second Monday of April 1887, $65,000; on the day preceding the second Monday of April, 1888, $65,000.
    The plaintiff failed and omitted to return the balance due under said contract or any part thereof, for taxation under the laws of - Ohio. The auditor of Hamilton county in the discharge of his duty, in 1888, cited Rheinboldt to show cause why the auditor should not put upon the tax duplicate.the said balance for the respective years, and after a hearing did put upon the duplicate said sums as taxable credits, and charged against the plaintiff the ordinary state and county taxes in like manner as against the property of other citizens. Only the simple taxes were charged, without penalty or interest. In the common pleas an injunction was allowed. The circuit court, on appeal, held that said balances for the 'respective years were taxable, and dismissed the petition. To this judgment error is prosecuted.
    
      Von Seggern, Phares, & Dewald, for plaintiff in error.
    
      J. B. Foraker and L. C. Black, for defendants in error.
   By the Court.

It is contended that the transaction, between Rheinboldt and the Kauffmans was a conditional sale, inasmuch as the vendor retained the title to the real estate covered by the contract, and stipulated to convey only on payment of the purchase money, and therefore, the sum remaining due as purchase money cannot be taxed. We are unable to assent to this view. Had the property sold all been personalty probably this claim would not be made, for the reason that the sale as to that was admittedly absolute. But can it make any difference that the contract embraces real estate, and that the title, so far as Rheinboldt held it, continued in him ? By whatever name the transaction is described, the fact remains that the obligation of the Kauffmans to pay the purchase money was absolute; it was a chose in action having value, a legal claim and demand enforceable by Rheinboldt by action at law irrespective of his lien as vendor, the retention of the -legal title being only as security. The installments, as they became due, were rights in action which Rheinboldt might sell, and payment of which the purchaser might enforce by suit. The several amounts were, therefore, within the meaning of our tax laws, credits which, by the constitution, are required to be taxed. As to the claim that to tax these sums would result in double taxation it is enough to say that although the real estate continued to stand' in the name of the partnership on the duplicate, yet, by the contract, the Kauffmans were obligated to pajrall taxes and assessments, and if Rheinboldt, because of default on the part of the Kauffmans, should be compelled to pay any such charge, such payment would be payment of a debt of the Kauffmans rather than his own, and a legal right to collect of them would result.

These amounts being • subject to taxation, the - right of the auditor to go back for five years and place them on the duplicate for simple taxes, is established by the case of Gager v. Prout, 48 Ohio St., 89. No question of penalty or interest is involved.

Judgment affirmed.  