Hull v. Southern Development Co.

⁹ McSherry, C. J., delivered the opinion of the Court. The Southern Development Company of Hagerstown is a body corporate. It was charged on the assessment books of Washington County with county taxes on the shares of its capital stock. These taxes being unpaid for the year eighteen hundred and ninety-five, the collector levied on its real estate and subsequently sold the same to satisfy the amount claimed to be due, not on the property sold, but upon the shares of its capital stock owned by its stockholders.

The ratification of the sale was objected to on various grounds. The sale was finally set aside by the Circuit Court and the Tax Collector then took this appeal. A motion has been made to dismiss the appeal ; and though that motion must prevail for reasons that will be stated later on, we have been urged to express our views on the merits of the case. As the question involved is of considerable importance and relates to the method to be pursued in the collection of this class of taxes, we are led to examine and decide it, for it is not at all probable that it will ever again be more fully or thoroughly discussed at the bar than it has been in this case.

By sec. 141, Art. 81 of the Code as amended by the Act of 1896, ch. 120, it is in substance provided that the taxable value of shares of the capital stock of banks, corporations and joint stock companies shall be ascertained by deducting the assessed value of the real estate owned by the bank, corporation and joint stock companies from the aggregate value of all the shares and by then dividing the residuum by the number of the shares of the capital stock ; and the quotient is then declared to be the taxable value of each share for taxation by the State. It is further provided by the same section that this valuation shall be certified to the County Commissioners of the counties and to the Appeal Tax Court of Baltimore, by the State Tax Commissioner, and that the taxable value of such shares owned by residents of this State shall, for county and municipal purposes, be valued to the owners thereof in the county or city in which ¹⁰ such owners may reside. The section then continues : “ but the taxes assessed upon said respective taxable values of such respective share or shares of stock, shall be collected from such bank, corporation or joint stock company, and when so paid shall be charged by such bank, corporation or joint stock company to the account of such stockholder or stockholders respectively.” It is quite apparent, and we have heretofore held in U. S. Elec. Pr.

Co. v. State, 79 Md. 70 , that this tax on the shares of stock is a tax not due by the corporation but by the individuals who own the stock, and that the corporation is, for the sake of convenience, made the agent of the State and the county to collect it. This being so, the question is, can the property actually owned by and really belonging to the corporation, but not charged with the payment of the tax assessed against the owners of the shares of the corporation’s capital stock, be levied on and sold under a distraint to pay the tax which the statute imposes on the shareholder, but directs the corporations to collect? In other words, can the property of one person be summarily seized and sold to pay the taxes due by another, simply because the one is made the agent to collect the amount payable by