Bamberger v. Mayor of Baltimore

Pattison, J., delivered the opinion of the Court. The Mayor and City Council of Baltimore brought suit against the appellants as executors of Elkan Bamberger,, deceased, to recover city taxes for the year 1910 upon the-estate of the decedent. The estate consisted of furniture- and household effects and of “bonds, certificates of indebtedness and evidences of debt.” On the first day of October,. 1909, the furniture was valued and assessed, for the purpose-of taxation for the year 1910, at the sum of $600, and the bonds, etc., were at such time and for said purpose assessed at the sum of $258,756. After such valuation and assessment and after the passage of an ordinance on the 23rd day of December, 1909, making the annual levy of taxes, but before the taxes became due and payable on January 1, 1910,. the appellants, under an order of the Orphans’ Court of Baltimore City passed on the 29th day of December, 1909,. distributed the estate of their decedent without paying therefrom the aforesaid taxes for the year 1910.

It was to recover these taxes that the suit in this case was brought, and the only question presented by this appeal is, whether the appellants as such executors are liable for the payment of said taxes. It is not because of any beneficial ownership in the estate of their decedent that administrators and executors are chargeable with the payment of taxes thereon, but it is a statutory liability imposed upon them as custodians and holders, in their representative capacity, of a qualified title in the estate, pending its settlement, and consequently we must look to the statute to find their liability as well as the extent of such liability. ⁴³³ Section 70 of Article 81 of the Code of 1912 provides that “Administrators shall pay all taxes due from their decedent as preferred debts, and to the exclusion of all others, except the necessary funeral expenses; and on failure, their bonds shall be put in suit for the use of the State, and recovery had for the whole amount of taxes due, and interest from the time they were payable”; and section 11 of said Article provides that “The several registers of wills in this State shall annually, on or before the first day of March, return to the county commissioners or appeal tax court, a summary account of all property that shall appear by the records' of the several orphans’ courts to be in the hands of such executor, administrator or guardian as such; and all such property, if not before assessed, shall then be assessed; and every executor, administrator or guardian shall be liable to pay the taxes levied thereon and shall be allowed therefor by the orphans’ courts in their accounts.” In our opinion, the above provisions of the Code, when construed together, confine the liability of administrators and executors to the payment of those taxes due from the decedent at the time of his death and to such other taxes as may thereafter become due while the estate is in the course of settlement and before it is distributed, including, of course, the taxes upon assessable property that was not at the time of decedent’s death assessed, but which was thereafter, under said section 11, assessed and brought within the operation of levies previously made. The correctness of this conclusion is shown by the decisions of this Court in Wheeler v. Addison, 54 Md. 41 , and State v. Safe Deposit & Trust Co., 86 Md. 581 . In the first of these cases the Court was construing section 63 of Chapter 483 of the Acts of 1874, which is now section 68 of Article 81 of the Code, with the sole amendment that from the proceeds of the sale only the taxes upon the property" sold shall be paid.

This Court in that case said: “The salé was made September 14, 1877, and the taxes were not then ⁴³⁴ due and in arrear for the year 1877. Section 63 of the Acts of 1874, Chapter 483, reads thus: ‘Whenever a sale of either real or personal property shall he made by any ministerial officer, under judicial process or otherwise, all sums due and in arrears for taxes from the party whose property is to be sold, shall be first paid and satisfied, and the officer or person selling shall pay the same to the collector of the county or city, if any, or to the treasurer if there be no collector. And the 66th section of the same Article declares that taxes shall be considered in arrears on the first day of January next succeeding the date of their levy, and shall bear interest from that date at the rate of six per cent, per annum.’ According to the express language of the statute, taxes are not to be regarded in arrears until the first day of January after the levy made. These taxes are expressly named as being for 1877.

They were therefore not in arrears until the first of January, 1878, and by the terms of the law the trustee was not bound to pay them.” In the case of State v. Safe Deposit & Trust Company, supra, the main question there presented was when did the State taxes assessed upon the stock of the corporation become due. The determination of that question was necessary in order to determine whether the trustee, who had sold some of the stock of the corporation on the 23rd day of May, 1895, was chargeable with the taxes for that year. This Court held in that case that the taxes were not due and in arrears, under section 84 of Article 81 of the Code of 1888, as modified by the Acts of 1890, Chapter 244, until the first day of November, and consequently such taxes were not due and in arrears when the property was sold on May 23rd of that year. The Court having decided when the taxes became due' and in arrears, it then became necessary, in order to determine whether such taxes were properly chargeable against the trustee, for the Court to construe section 64A of Chapter 407 of the Acts of 1896, now section 69 of Article 81 of the Code of 1912, which provides that “Whenever a sale of ⁴³⁵ either real or personal property of a corporation, on which State taxes are dne and payable, shall be made by any sheriff, constable, trustee, or other ministerial officer, under judicial process or otherwise, all sums due and in arrears for State taxes from the corporation whose property is sold, shall be first paid and satisfied after the necessary expenses incident to the sale.” And the Court there said: “As the sale of the property (the stock of the corporation) took place on the 23rd day of May, 1895, there were no taxes for that year due and payable at the time of this sale properly chargeable against the trustee, the appellee in this ease.

The statute provides only for the payment of such taxes as may be due and in arrears at the time of the sale of the property.” This Court again construed section 68 of Article 81 in the Casualty Ins. Co.'s case, 82 Md. 565 , in which it said: “These taxes were consequently due when the company’s assets passed into the hands of the receiver, and being then due, the Act of 1892, Chapter 518 (now section 68 of Article 81 of the Code of 1912), directs that they shall be paid and satisfied by the officer or person selling under judicial process the property, real or personal, upon which such taxes are payable.” But it is contended by the appellees that the liability of administrators and executors in respect to the payment of taxes upon the estate of their decedent has been extended and enlarged by certain provisions of the city charter found in sections 36, 40, 168 and l'7l (Acts 189S, Ch. 123). Section 36 creates the Board of Estimates and provides that such board shall annually, between the first day of October and the first day of iNfovember, cause to be prepared a draft of an ordinance to be submitted to the City Council providing appropriations sufficient to meet all expenditures of the city government for the ensuing year, which ordinance when passed is designated therein as the ordinance of estimates. ⁴³⁶ Section 40 provides: “The Board oi Estimates shall, on the first day of October, or as soon thereafter as practicable, in the year 1898, and in each succeeding year, procure from the proper municipal departments and shall send with said ordinance of estimates to both branches of the City Council a report showing the taxable basis for the next ensuing fiscal year and the amount which can reasonably be expected to be realized by taxation for said year. The report shall show the difference between the anticipated expenditures and receipts of the city and shall state a rate for the levy of taxes sufficient to raise the amount required to meet the said difference.” The section then provides for the passage of an “ordinance making the annual levy of taxes, which ordinance shall be passed by the Mayor and City Council of Baltimore in the month of November in each year, and as soon as practicable after the passage of the ordinance of estimates, the Mayor and City Council of Baltimore shall fix a rate of taxation not less than the rate stated in the aforesaid report. * * * The taxes levied under said ordinance * * ■* shall be the taxes to be collected for the fiscal year next ensuing after said month of November and may be paid to the city collector on or after the first day of January next ensuing said levy.

The taxes included in said levy on * * * all forms of personal property shall be in arrears on the first day of May next ensuing the date of their levy,” and shall bear interest from such time. Section 168 is a re-enactment of said section 11 of Article 81 of the Code of 1912, with the single amendment that the return therein mentioned to be made by the register of wills is .to be made on or before the first day of October instead of on or before the first day of March, as provided in said section 11 of the Code. Section 171 of the charter provides: “In the year 1898, and in all succeeding years thereafter, the valuation of the property subject to taxation ⁴³⁷ in the City of Baltimore, as it shall appear upon the assessment hooks of said court on the first day of October in each and every year, shall be final and conclusive and constitute the basis upon which the taxes for the next ensuing fiscal year shall be assessed and levied; provided, the aforegoing provisions shall not apply to property in the city liable to taxation and which may have escaped or which may have been omitted in the regular course of valuation, hut such property shall be valued and assessed and the owners thereof charged with all back and current taxes justly due thereon whenever the same may be discovered and placed upon the assessment books.” It is upon the provision found in section 171, “that the valuation of property subject to taxation in the City of Baltimore as it shall appear upon the assessment books of said Court on the first day of October in each and every year, shall be final and conclusive and constitute the basis upon which the taxes for the next ensuing year shall be assessed and levied,” considered in connection with the aforesaid .sections 36, 40 and 168- of the Charter, that the appellees chiefly rely in their contention that upon and after the aforesaid valuation and assessment of the decedent’s estate the appellants, as his executors, became liable for the payment of the taxes thereon for the ensuing year, even though the estate was distributed by them, under the order of the Orphans’ Court, before said taxes became due. This provision of the present charter appears, in practically the same language, in the City Codes of 1879, 1892 and 1893, the only difference being, as shown by the preceding codes, that the assessment and valuation was to be made upon the first Monday of March and not upon the first day of October, as provided by the present charter.

In the case of Hopkins v. Van Wyck, 80 Md. 7 , which was decided November 14, 1894, this provision of the charter was before the Court. In that case property which was in ⁴³⁸ existence and assessable on tbe first Monday of March,' 1892, escaped valuation and assessment and was not at such time entered upon the assessment books. It was thereafter, on May 12, pursuant to section 9, now section 11 of Article 81, placed upon the assessment books of that year. The executors, however, resisted the payment of the