Ghingher v. Mayor of Baltimore

Bond, C. J., delivered the opinion of the Court. The bank commissioner appeals in this case from an order for the issue of a writ of mandamus requiring release to the city of money received in tax collections by three banking institutions which are in custody and control under the Emergency Banking Act, discussed in opinions filed shortly preceding this one. Acts 1933, ch. 46. The collections had been made in cash, and in compliance with the terms of an agreement between the official city collector and the institutions, under authority of a city ordinance, the institutions had transmitted their cashier’s checks to the city in payment; and the checks were not cleared and paid before the banking holidays and the passage of the Emergency Banking Act.

A total amount of $95,000 was represented by the checks. The court below overruled a demurrer by the commissioner to the city’s petition for the writ of mandamus, and the appeal is from that action. ³²⁶ The questions raised are whether the city collector was authorized to- make an agreement with the hanking institutions, adopting for the city the arrangement described for making remittances to the city, whether the agreement authorized a commingling of the cash -collected with the banking funds, and, if it did, whether the city would in the situation existing under the emergency act be entitled to a release of the money collected. The- co-urt below decided that the city collector had no- authority to agree upon an arrangement which would result in the commingling of the cash collections with the banking funds and establish a relation of debtor and creditor with the institutions, and that, the funds having been wrongfully commingled upon a mistaken assumption of that authority, the holding of the banks was upon a trust ex maleficia, under the principle expounded and applied in Frederick County v. Page, 163 Md. 619 , 164 A. 182 . The City Charter, article 4 of the • Code of Public Local Laws, sec. 6, subsec. 28 (a), gives the city “full power to provide by ordinance for collection” of city taxes; and section 42 of article 4 of the Charter, concerning the city collector, his duties and powers, provides that he “shall have such assistants, clerks and bailiffs as may be- fixed by ordinances, and who shall perform such -duties as shall be prescribed by ordinances not inconsistent with this Charter.” It was under the supposed authority of these sections that in 1928 the Mayor and City Council adopted the plan of utilizing the banking institutions distributed about the city ás places for payment of taxes- and as transmitting agencies.

An ordinance, numbered 512, and approved July 14th, 1928, by its terms authorized and directed the- collector to- designate and appoint banks and trust companies, which had been previously approved by the commissioners of finance of the city, as city depositories, to act as the collector’s agents and assistants in the collection of state and city taxes, and to provide and establish the forms of receipts and reports and such other paraphernalia as he might deem necessary in the execution of the ordinance. It was provided that bills re ³²⁷ ceipted by these agencies should have the same force and effect as if receipted by the proper city officials directly, and provided also that no agreement made by the collector with any bank or trust company pursuant to the authority granted by the ordinance should be binding on the city unless approved by the board of estimates. Under this plan taxes have been paid through thei various banking institutions since the approval of the ordinance, at present under a second form of agreement made in 1931 by thei collector with the institutions. It is accompanied by a set of rules, made part of the agreement.

By the terms of the present agreement the banking institution is to deliver to the city checks, drafts, and money orders drawn to the city or to the collector, bpt is to “send its own check to cover the amount of payments received by it in cash.” It is provided that all moneys received shall be received and held as the money of the collector, “and said agent agrees to be responsible to the collector for the safe keeping of the same and the delivery thereof to the collector, in accordance with this agreement.” “This is a limited agency,” it continues, “and the agent shall have no authority of any kind from the collector except that herein expressly stated. * * * In the performance of all and every of the acts and things undertaken by it to be performed under and by virtue of this agreement, the said agent shall be deemed to be and taken as a trustee, and shall receive and accept all of said payments and shall hold the same as herein provided, and account for and transmit the same to the