Humbird v. State Tax Commission

Oeeutt, J., delivered the opinion of the Court. This appeal was taken from an order of the Circuit Court for Allegany County ratifying and confirming an order of the State Tax Commission of Maryland, assessing against J. Wilson Humbird, for purposes of state and municipal taxation “securities held by non-resident trustees of the estate of Jacob Humbird, deceased, in which J. Wilson Humbird has an equitable interest (1/6 of $1,305,842) equal $217,-640.” The main question presented by the appeal is whether the appellant’s share of the estate of Jacob Humbird should be ⁴⁰⁷ assessed at the value of the property itself, or whether it should be assessed at the value of his use of it, or the value of his equitable estate therein. Subsidiary to that main, inquiry are. three others, one- a question of law and fact, which is whether David Humbircl was. at the time of the assessment a resident of Maryland, and two, a question of law, which is, if two of three trustees in possession of a trust estate consisting of intangible personal property are nonresidents of Maryland while one resides therein, is the share of the owner of an equitable interest in such property who resides in Maryland to be assessed for taxation under the provisions of section 2 of article 81, Code Pub. Gen.

Laws of Maryland, or' under the provisions of section 215 of said article, and three, also a question of law, which is., in either case is such assessment to be made according to the value of the property from which the beneficiary’s income issues, or according to the value of said ¿es-iui que trust’s equitable interest therein. The facts from which these questions arise are these: Jaeob Humbird, late of Cumberland, Allegany County, Maryland, deceased, left an estate, now composed solely of intangible personal property, which under the terms of his will is held by three trustees for the use of the testator’s children for their respective lives and at their death for their heirs in fee. The appellant, one of the children and a cestui que trust named in the will, resides in Maryland. The securities composing the estate are held outside of the State, and two of the three trustees reside out of the State, while the residence of the third trustee is in dispute.

The value of each child’s share was over two hundred thousand dollars, but until 1921 the appellant’s share of the estate had only been assessed at $30,000. On April 1st of that year he was notified that that assessment had been increased to $179,850, and given an opportunity of being heard on the increase. He filed objections, which were heard by the County Commissioners of Allegany County, who assessed the property at $208, G59. From that order appellant appealed to the State Tax ⁴⁰⁸ Commission, which increased the assessment to $217,640.

From that order the present appeal was taken. It is conceded that if David Humbird, one of the trustees, is a non-resident of Maryland, that the property should be assessed under section 2, article 81, Code Pub. Gen. Laws of Maryland, and it is therefore important to know whether David Humbird did or did not reside in Maryland at the time the assessment was made.

The appellant in his petition filed with the State Tax Commission asserted that “this property so held by said trustees for the purpose of carrying out said trust in favor of your appellant and others, consists wholly of personal property, such as stocks, bonds., notes and other property known as intangible personal property, and .all the same is held by said trustees, two of whom reside in the State of Washington and the third one residing part of the year in Wisconsin and part in Florida, and said trust property being all kept at the office of said trustees in a bank in the City of St. Paul, Minnesota.” In his petition filed in the Circuit Court for Allegany County he said that David Humbird was a resident of Montgomery County, Maryland. In an agreement of counsel filed in the case, it was agreed that in his testimony before the State Tax Commission he said that David Humbird resided in Montgomery County, Maryland, while, in the testimony taken before the County Commissioners, he said: “The original trustee was my brother, John A. Humbird. Present trustees: Thomas J. Humbird, residence, Spokane, Washington; William H. Farnham, Spokane, Washington; David Humbird, who spends most of his time in Hudson, Wise., between there and Florida.” If the decision of the State Tax Commission rested upon its finding as a matter of fact that David 'Humbird was a nonresident of Maryland, we could not, upon that evidence alone, disturb the finding (Fidelity Trust Company v. Gorman, 134 Md. 340 ), and we might rest our decision upon that conclusion, but as the other questions stated above involve legal principles affecting the liability of the taxpayer and the ⁴⁰⁹ revenues of the State, and since they were fully argued by counsel, we will also consider them. Section 2, article 81, Code Pub.

Gen. Laws of Maryland in part provides: “All personal property in which any resident of this State has an equitable interest with the legal title to the same in some other person or corporation who is a non-resident shall be valued and assessed for the purpose of state, county and municipal taxation to the equitable owners thereof in the county or city in which he, she or it resides, and such equitable owner or owners shall pay the tax thereon.” Section 215, Ibid,, provides: “All bonds, certificates of indebtedness or evidence of debt, in whatsoever form, made or issued by any public or private corporation incorporated by this State or any other state, territory, district or foreign country, or issued by any state, territory, district or foreign country, and all personal property of any kind whatsoever, not exempt from taxation by the laws of this State, in which any resident of any county of this State has an equitable interest, with the legal title to the same in some other person or corporation who is a resident of some other county of this State , or of the City of Baltimore, or (in the case of a corporation) which has its main office or principal place of business in some other county in this State or in the City of Baltimore, shall be valued and assessed for the purposes of State and county taxation to the equitable owner thereof in the county in which he or she resides, to the extent of his or her equitable interest as aforesaid, and the taxes due thereon shall be paid by the holder of said legal title to the collector of taxes for the county or city in which said property is so valued and assessed.” The appellant contends first that if David Humbird, one of the three trustees, is a resident of Maryland, although the ⁴¹⁰ other two are non-residents, nevertheless the appellant’s interest in the estate must be assessed under the provisions of section 215 of the said Code and not under the provisions of section 2 thereof. That position in our opinion involves a contradiction in terms of the very language of the statute and is entirety untenable. The operation of that statute depends upon the precedent concurrence of certain conditions which it prescribes, that is to say, the “legal title” to the property referred to in the statute must be in some person who is a resident of some county of this State or the City of Baltimore, and an equitable interest therein., must be held by a person resident in another county of this State, or in the City of Baltimore, and since the “legal title” means the entire legal title, it cannot well be argued that the “legal title” to the property with which we are dealing now, and which is vested in three trustees, two of whom reside without the State, can be said to be vested in “a person” who is a resident of some county of the State or the City of Baltimore.

The words “person or corporation” were obviously designed to cover and describe whomsoever or whatsoever could hold title to such property and, where the title was in several, it was intended to apply to and describe the aggregate ox sum of all the parts or interests, and where it was held by several persons in a representative capacity it was intended to apply to and describe all the persons sharing the office as constituting one person. If three persons owned an acre of ground as joint tenants or as co-trustecs, it could not he said that the legal title to that land was in each or in any one of the three, since it was in all of them and anything less than the sum of the three interests would be less than the “legal title.” This seems to be self evident and to necessarily result from the words used in the statute. 26 R. O. L. 1333. To hold that where the entire legal title to the property is in three persons, the entire legal title to it is also in each of the three persons would be to hold that a part is equal to the whole. In our opinion, therefore, the “legal title” to the property in question is not in a “person or corporation” resident in ⁴¹¹ this State, and the interest of the appellant in it cannot be assessed under the provisions of section 215, article 81, Code Pub.

Gen. Laws of Maryland. On the other hand it is clearly within the provisions, of section 2, Ibid., which provides : “All personal property in which any resident of this State has an equitable interest with the legal title to tlie same in some other person or corporation who is a non-resident shall he valued and assessed for the purposes of state, county and municipal taxation to the equitable owners thereof in