Mayor of Baltimore v. Comptroller of the Treasury

²⁹⁵ Rodowsky, J., delivered the opinion of the Court. Cole, J., dissents. At issue here is whether the Comptroller of the Treasury (Comptroller) may attach the wages of an employee of the Mayor and City Council of Baltimore (the City) in order to collect on a recorded lien for delinquent retail sales taxes, interest and penalty. The Comptroller’s position is that the claim of the State, as the superior sovereign, prevails over any immunity which the City might otherwise enjoy from being made a garnishee.

In opposition the City contends, inter alia, that the General Assembly did not intend that the procedures available to the Comptroller for the collection of retail sales tax obligations include garnishments served on public officials. We agree with the City’s position for the reasons which follow. Shirley B. Allen is a City schoolteacher. On July 25,1972 the Comptroller assessed her for unpaid retail sales tax, interest and penalty in the amount of $6,542.57.

Acting pursuant to Md. Code (1957, 1980 Repl. Vol.), Art. 81, § 342 (b), 1 the Comptroller recorded among the judgment records ²⁹⁶ of Baltimore City a lien in that amount indexed in her name. On October 18, 1979 the Comptroller directed the Clerk of the Superior Court of Baltimore City to issue a wage attachment on the lien and directed the Sheriff of Baltimore City to lay the writ of attachment in the hands of the Central Payroll Division of the City, as garnishee of Shirley B. Allen. The trial court granted the City’s motion to quash and the Court of Special Appeals reversed.

Comptroller of the Treasury v. Mayor and City Council of Baltimore, 48 Md. App. 199 , 425 A.2d 1389 (1981). We granted the City’s petition for certiorari. "[T]he weight of authority favors the view that municipal corporations and their officers having money or property in their hands to which other persons are entitled are not liable to the creditors of such persons on attachment or garnishment process unless made so by statute or charter.” 17 E. McQuillan, Municipal Corporations § 49.86, at 386 (3d ed. 1968). Accord, Annot., Garnishment of Salaries, Wages or Commissions Not Expressly Exempted by Statute, Part II, "Salaries or wages of public officials or employees,” 56 A.L.R. 601 , 602-624 (1928); 6 Am.

Jur. 2d, Attachment and Garnishment, § 78 (1963). The Comptroller advances a two-step argument why the general rule does not apply here. First, he says that the writ of attachment is available for the collection of all taxes imposed under Article 81 by virtue of § 208 thereof. Secondly, he says that when the State attaches the wages of an employee of a political subdivision, the political subdivision may not assert immunity against its creator.

Section 208 is part of the subtitle, "Suits for Collections of Taxes,” which consists of §§ 206 through 211 of Art. 81. This subtitle was established by the Tax Revision Act of 1929 (Ch. 226). Present § 206 (a) provides: Any tax may be collected from the person liable under this article to pay the same by action of ²⁹⁷ assumpsit instituted at any time after said tax shall become due and payable, within the period of limitations. . . . Section 207 deals with the name in which "[a]ny such suit for the collection of State taxes may be instituted .. ..” Then, § 208, dealing with attachment, provides: Any such suit, whether the defendant be a resident or a nonresident of this State may be begun by writ of attachment against the lands, goods, chattels or credits of the defendant; and such attachment, except as in this article otherwise provided, shall be governed in all respects by the rules of law and procedure applicable to attachments for liquidated damages against nonresidents; and no attachment bond shall be required of the plaintiff. [Emphasis added.] The attachment laid on the City in this case cannot be predicated on § 208.

The suit which "may be begun” by writ of attachment under § 208 is one which includes a declaration in assumpsit for taxes as contemplated by § 206 (a). Section 208 describes attachment on original process. This is clear because attachment on original process is the type of attachment by which an action is begun and because § 208 incorporates the procedure applicable to attachments for liquidated damages against nonresidents. These are elements which are of significance in attachment on original process.

See Md. Code (1974, 1980 Repl. Vol.), §§ 3-302 through 3-305 of the Courts and Judicial Proceedings Article and Md. Rules G40-G61. The attachment requested by the Comptroller in this case, and issued by the Clerk, was an attachment on judgment. It is sometimes referred to as an attachment "at the foot of judgment” in order to distinguish it from attachment on original process.

As Judge Digges, writing for this Court, explained in Northwestern National Insurance Co. v. William G. Wetherall, Inc., 267 Md. 378, 384 , 298 A.2d 1, 5 (1972): "An attachment by way of garnishment issued after judgment is a mode of execution and its function is approximately the ²⁹⁸ same as that of a writ of fieri facias. As attachment proceedings are in derogation of the common law, their existence is dependent upon special provisions authorizing them.” Today attachment on judgment is authorized by Md. Rule 623, which reads: A plaintiff having a judgment may, instead of any other execution, issue an attachment against property of the defendant in the plaintiffs own hands, or in the hands of any other person, which attachment shall contain the clause of scire facias required in an attachment against a nonresident or absconding debtor as provided by statute or these Rules. Inasmuch as Art. 81, § 342 (b) provides for the recording and indexing of notice of a sales tax lien "in the judgment docket of the court,” as was done here, and provides that the lien "shall have the full force and effect of a lien of judgment,” we interpret "judgment” as used in Rule 623 to include a recorded sales tax lien. The questions then remain whether the writ of attachment under Rule 623 may be laid in the hands of a political subdivision garnishee, and if so, by whom.

Rule 623 reads that the writ may be laid in the hands "of any other person ....” "Person” is defined in Md. Rule 5 q to mean "any natural person, partnership, joint stock company, unincorporated association, or society, or municipal or other corporation of any character whatsoever.” 2 The meanings ascribed to the defined terms in Rule 5 apply "except insofar as expressly otherwise provided, or as may result from necessary implication.” If the definition of Rule 5 q is fully and literally read into "any other person” in Rule 623, then attachments on judgment may be served upon political sub ²⁹⁹ divisions not only when the State holds the judgment, but also when any private creditor holds a judgment against a debtor who is entitled to a credit held by a political subdivision. But such a reading would overturn the long established Maryland law under which attachments do not lie against counties and cities — at least at the instance of a private creditor. The root case in this State is Baltimore v. Root, 8 Md. 95 (1855) in which a private creditor issued an attachment on judgment to the City, to reach the salary of a police officer. The creditor in that case recognized that attachments could not be laid on the State but contended the rule did not apply to municipal corporations.

In rejecting that argument this Court placed heavy reliance on Bulkley v. Eckert, 3 Pa. 368 (1846) where the attachment for the wages of a schoolteacher was laid in the hands of the treasurer of the township school board. We quoted therefrom the following rationale (Baltimore v. Root, supra, at 101): "Great public inconvenience would ensue if money could be thus arrested in the hands of officers, and they be made liable to all the delay, embarrassment and trouble that would ensue from being stopped in the routine of their business, compelled to appear in court, employ counsel, and answer interrogatories, as well as take care that the proceedings are regularly carried on, and bail to return duly given. If a precedent of this kind were set there seems no reason why the State or county treasurer, or other fiscal officers of the commonwealth, or of municipal bodies, may not be subjected to the levying of attachments, which has never been attempted nor supposed to come within the attachment law. We do not, therefore, think this is such a debt as is contemplated by that law.” Because "municipal corporations are parts of the State government exercising delegated political powers, for public purposes,” Root held that the rule which prevents an attach ³⁰⁰ ment from being levied upon the State "must apply with equal force to a case like the present.” Id. at 102 .

The creditor in Root next contended that although the original Maryland statute authorizing attachment by way of garnishment issued after judgment, Ch. 40 of the Acts of 1715, 3 as amended by Ch. 56 of the Acts of 1795, did not by its terms extend to corporations, the Acts of 1825, Ch. 114, § 2 allowed attachments on judgments against goods, chattels and credits of the judgment debtor "in the hands of any other person or persons whatever corporate or sole,” and thereby included municipal corporations. In rejecting that contention this Court said that the "argument from inconvenience, which, exclusive of the Act [of 1825] prohibits or denies the right of attachment, we think will sanction the construction that the Legislature did not design to include municipal corporations.” Id. at 103. It was noted that although the Pennsylvania statute at issue in Bulkley v. Eckert, supra, was "certainly very general,” that court had nevertheless decided that state, county or municipal fiscal officers "are not subject to the levying of attachments, and have never been supposed to come within the attachment law.” This Court then reasoned: [I]f... the necessity for guarding the public against the evils resulting from a different theory, induced the construction given in that case, there is just as much propriety, from necessity, in the present instance, for holding, that although the Act of 1825 gives authority to levy an attachment in the hands of any person or persons, corporate or sole, nevertheless officers of a municipal corporation are not subject to the provisions of that Act. The principle seems to be well settled, that without this Act such officers would not be liable to process of this sort.

That necessity which established this principle, and which likewise justified the Pennsylvania courts in so restricting the general ³⁰¹ language of their statutes as not to include even the treasurer of the board of school directors for a township, will not permit us so to construe our law as to sustain the plaintiffs claim. Reason and necessity we think fully justify the construction that the Act does not include but excepts cases of this sort. [Id. at 104. (Emphasis in original).] Attachment cases in this Court have been consistent in their adherence to Root. See Wilson v. Ridgely, 46 Md. 235, 248 (1877) ("Though the provisions of the attachment laws of this State are very broad, we cannot believe that they were ever intended to authorize attachments to be laid upon funds in the hands of State or municipal officers as such, and thereby impose upon them and the public service such annoyances, inconveniences and interruptions as are described [in Bulkley v. Eckert].”); Keyser v. Rice, 47 Md. 203, 213 (1877) ("From considerations of public convenience, the Courts have long since decided, that attachments would not lie against the salaries of public or municipal officers ....”); Dale v. Brumbly, 98 Md. 468 , 56 A. 807 (1904) (Root-like analysis applied to attachment laid in hands of clerk of circuit court); Lawrence v. Commercial Banking Corp., 165 Md. 559, 561-62 , 169 A. 69, 70 (1933) ("It is well settled in this state that wages or salaries of public officers or agents are not attachable.

This results from the immunity of the government from suit as well as from principles of public policy.”); Hughes v. Svboda, 168 Md. 440, 443 , 178 A. 108, 109 (1935) ("[S]ince the laws of the State were not intended to give authority to lay attachments in the hands of public officials or state institutions (Wilson v. Ridgely, supra), it necessarily follows that their operation is not suspended by a confession of assets.”); Ridge Lumber Co. v. Overmont Development, 34 Md. App. 14 , 366 A.2d 125 (1976) (affirming the quashing of an attachment laid in hands of Baltimore County, Maryland). Accord, Karwacki, Attachment of Wages in Maryland, 16 Md. L. Rev. 227 , 231 (1956); Rhynhart, Attachments in the People’s Court of Baltimore City, 14 Md. L. Rev. 235 , 263 (1954); I. Gomborov, Law of Attachment in Maryland 24-25 (1926); 2 J. Poe, Pleading ³⁰² and Practice § 699 (5th ed. 1925); W. Hodge and R. McLane, Law of Attachment in Maryland § 140 (1895). At this stage of our analysis we conclude that necessary implication requires that Rule 623’s use of the term "person” was not intended to alter prior Maryland law and does not result in statutory authorization for private creditors holding judgments to lay attachments on municipal corporations. However, in none of our decisions to date, involving public garnishees, has the State been the attaching creditor.

The reason for the result reached in cases of private creditors has not always been consistently expressed. In Baltimore v. Root, Wilson v. Ridgely and Hughes v. Svboda, all supra, the analysis was that public official garnishees were not included in the generally phrased statute which authorized attachment. On the other hand Lawrence v. Commercial Banking Corp., supra, directly placed the rule on immunity and public policy grounds. The present case brings into focus the possible differences in the analysis underlying the result of our prior decisions.

Here the Comptroller presumes that the writ has reached wages due to Shirley B. Allen and views the issue as one of competing policies, i.e., whether the interest of the public official garnishee at the municipal level of government must yield to the interest of the State in collecting taxes due to it. On the other hand, if the writ of attachment in Maryland does not run to public official garnishees, then the wages of Shirley B. Allen have not been reached, because of a limitation on the scope of the process. In the latter event, the issue of competing policies is not reached. Two other of our decisions touch upon this problem.

Phillips v. Baltimore City, 110 Md. 431 , 72 A. 902 (1909) was the case of a homeowner in Baltimore County, near the City line, who sued the City in the Circuit Court for Baltimore County, alleging injuries to the person caused by a nuisance created by the City’s storm water system. In opposition to the City’s asserted venue privilege, the plaintiff sought application of a statute which provided that every corpora ³⁰³ tion may be sued where it regularly transacts business or exercises its franchises. Relying on Root , this Court pointed to the inconvenience involved in permitting a municipal corporation, in a transitory action, "to be dragged from one end of the State to the other at great cost and inconvenience to the public which constitutes the municipality” in order to defend. We construed the general venue statute as not to embrace municipal corporations.

Id. at 440, 72 A. at 906 . But, in that context, we said that "[t]o permit these great public duties to be hindered or delayed in their performance, in order that individuals or private corporations might more conveniently collect their private debts, would be to pervert the great object of the creation of municipal corporations.” Id. The other decision, Rockville v. Randolph, 267 Md. 56 , 296 A.2d 574 (1972), involved a paternity proceeding. Faced with a delinquency in support payments, the trial court entered an order directing the City of Rockville to deduct $15 per week from the salary of its employee, the father, and pay the same to a court officer.

This order was based upon Md. Code (1957, 1966 Repl. Vol., 1971 Cum. Supp.), Art. 16, § 66H which had been amended by Ch. 154 of the Acts of 1970 to provide that the court in such proceedings "may order a lien upon the earnings of the defendant ... and the employer is required to deduct that amount as soon as notified by the Court.” The City of Rockville moved to quash on the basis of Root . We sustained the payroll deduction order.

Child support is not a debt within the meaning of § 38 of Art. Ill of the Constitution of Maryland. We said that the order objected to was not an attachment within the meaning of Root and that there was no garnishment or garnishee. It was said that in that case "we have not a creditor in pursuit of the collection of a private debt, but a superior apparatus of government soliciting an order of court directing an inferior apparatus to hand over the part of money due an employee which is not a debt but an obligation to his dependent, absent the payment of which the superior apparatus must pay out of public funds a like amount to the employee’s dependent.” Id. at 62, 296 A.2d at 576 . We held that the Legislature by enacting Ch. 154, did not intend "to insulate the already large ³⁰⁴ and evergrowing battalions of laborers in the public’s vineyards against the power of the courts to conserve the public’s funds by enforcing the obligation of fathers of illegitimates to support their get.” Id. at 63 , 296 A.2d at 577 .

The opinion concluded by noting that "[i]t must not be supposed that we have attenuated Root or the cases which followed it. Today’s holding must not be thought to go any further than the facts presented.” Id. at 63-64, 296 A.2d at 577 . The Comptroller lays great stress on Rockville , but that opinion expressly recognizes the continued vitality of the Root line of cases. While we read Root and its progeny to espouse the proposition that attachments simply are not authorized to be served on public officials, the absence of precedent dealing with the State as creditor leads us to review other streams of law which converge in the issue here.

We shall look for additional guidance to the law relating to wage garnishments and to prior and present remedies for the collection by the State of special taxes. (i) The Comptroller’s attachment here is a wage garnishment. Historically, wage garnishments have been treated differently than other attachments. Maryland’s first wage exemption statute, enacted