Industrial Corp. v. State Tax Commission

Urner, J., delivered the opinion of tire Court. Under the provisions of sections 8833 and 880 of Article 23 of the Code of Public General Laws every “ordinary business corporation” is subject to taxation upon its property, but is exempt from taxation on its shares of stock. For purposes of taxation ordinary business corporations are defined by section 8833 as “all corporations having a capital stock,” except certain classes of corporations therein designated, among which are “safe deposit and trust companies, guarantee and fidelity companies, insurance companies of all kinds,” “building or homestead associations, state, national and savings banks, or savings or moneyed institutions.” The question presented by this appeal is whether the appellant corporation is a moneyed institution and therefore subject to assessment for taxation on its shares of stock, or is an ordinary business corporation and as such exempt from that form of taxation, under the Code- provisions just cited. The State Tax Commission of Maryland made assessments, in the years 1917 and 1918, of twenty-five dollars per share on the two- thousand shares of the capital stock of the appellant, having a par value of fifty dollars per share, and upon separate appeals from those assessments to the Baltimore- City Court, the action of the Commission was affirmed, the two appeals being heard simultaneously.

Further appeals have been taken by the corporation to this Court, as permitted by sections 239 and 245 of Article 81 of the Code, which limit the appellate review to questions of law. Baltimore v. C. & P. Tel. Co., 131 Md. 55 ; Postal Tel. Cable Co. v. Harford Co., 131 Md. 101 ; Hyattsville v. C. & P. Tel.

Co., 131 Md. 594 ; Fidelity Trust Co. v. State Tax Commission, ante, page ³⁸¹ The record filed in the Baltimore City Court, on each of the appeals from the State Tax Commission, contained only the petition of the appellant disputing its. liability to be assessed on its shares, and the report which it. had submitted, as required by law, giving information essential to the assessment of its stock or property for taxation, together with a statement of the assessment of which the appellant complains. The report describes the business conducted by the appellant as being in aid of industries in Baltimore. It appears also from, the report that the appellant’s assets consist principally of investments in the notes and securities of various industrial corporations. The Baltimore City Court, on application of the appellant, granted it leave to. amend its petition by filing as part thereof a certified copy of its charter, by which it. is disclosed that the company was incorporated for the following purposes.: “(a) To lend money and to purhcase, mortgage, sell, lease, improve, invest or otherwise deal in real estate or personal property, including accounts, notes and securities of every description. “(b) To acquire interests in industries and enterprises owned or controlled by individuals, firms or corporations. “(c) And in particular to lend money to individuals, firms or corporations engaged or about to become engaged in industrial pursuits in the City of Baltimore, or the vicinity thereof, to invest in the stocks, bonds or other securities of such corporations, and to perform such other acts as may be deemed necessary to encourage the location of new industries and enterprises in the City of Baltimore, or the vicinity thereof, or to render aid to those industries now located and carrying on business in the City of Baltimore, or the vicinity thereof. “(d) And to carry on any other business which may be necessary or proper to effectuate or facilitate the aforesaid objects, or any of them.” ³⁸² The corporate powers thus conferred to- lend money and to invest in stocks, bonds or other securities rendered the appellant legally capable of operating as a moneyed institution.

Its report in the record shows that its activities have been directed to the lending and investment of money, from which profits have been realized and in part distributed to the stockholders. It has been held by this Court that the name of a corporation and the powers granted by its charter reflect upon the question as to its real character, but that the transactions of which its business