Mayor of Baltimore v. County Commissioners

Pearce, J., delivered the opinion of the Court. This appeal requites üs to determine the interpretation and validity of chapter 579 of the Acts of 1900, entitled “An Act to add a- new section to Art. 1 of the Code of Public Local Laws, title ‘Allegany County,’ under the sub-title ‘Taxes,’ to follow' section 230 of sáid Article, and to be numbered section 230A,” which is as follows: “The incorporated institutions and companies of Allegany County, whether they shall or shall not have declared any dividends or earned any profits, shall pay the State and county taxes levied upon the assessed value of their capital stocks held by stockholders, residents or non-residents of Allegany County; but the holders of said stock shall not be liable to taxation upon the stock held by them.” The case originated in a bill of interpleader filed by the Barton and'George’a Creek Valley Coal Company of Allegatiy County, a body corporate of that county, engaged in mining coal therein, against the County Commissioners of Allegany County and the Mayor and City Council of Baltimore, for the purpose of determining which of the two municipal corporations last named was entitled to receive the taxes upon 500 ³ shares of the capital stock of said Coal Company held and owned in the city of Baltimore, said taxes being claimed by each of said municipal corporations, and the Coal Company being unable to decide between said claimants. A decree was made by consent requiring the claimants to interplead, designating the Mayor and City Council as plaintiff, and the County Commissioners of Allegany County as defendants, and ordering the Coal Company to pay into Court to the credit of the cause, the amount of taxes admitted to be payable upon said 500 shares of capital stock, if the same was payable to the City of Baltimore, that being larger than the amount payable if the same was payable to Allegany County. The cause was then submitted upon an agreed statement of facts, from which it appeared that the capital stock of said Coal Company consisted of 1,000 shares, of which 498 were held by the Black Sheridan and Wilson Company, a corporation of the State of Maryland, whose certificate was recorded in Baltimore City, and whose principal office and place of business was in said city, and one share was held by H. Crawford Black, and one share by Van Lear Black, both being residents of Baltimore City; and, that of the remaining 500 shares of capital stock, 250 were held and owned by Adam E. Hitchens, and the other 250 shares by the personal representatives of Owen Hitchens, deceased, the said Adam E. Hitchins, and the heirs, personal representatives, and distributees of said Owen Hitchens, deceased, being all residents of Allegany County, Maryland.

It was also admitted that the State Tax Commissioner of Maryland had duly valued all the capital stock of said Coal Company for the purposes of taxation for the year 1903, and had duly certified the same both to the Appeal Tax Court of Baltimore City and to the County Commissioners of Allegany County; that the former had valued and assessed the said 500 shares held by the Black, Sheridan and Wilson Company, and by H. Crawford Black and Van Lear Black, to their said respective owners in Baltimore City and had duly levied thereon the proper -tax for the year 1903 for Baltimore City; and the latter ⁴ had valued and assessed the entire capital stock of said Coal Company (as well the 500 shares owned and held as aforesaid by residents of Allegany County, as the 500 shares owned and held as aforesaid by residents of Baltimore City), to the respective owners thereof, in Allegany County and had duly levied thereon the proper tax for the year 1903 for Allegany County, and that none of said taxes for the year 1903 had been paid to either of said claimants, but that the amount ordered to to be paid into Court had been duly paid in. It was admitted that prior to the enactment of said Act of 1900, the said 500 shares held and owned in Baltimore City had for a long time been valued and assessed .to the owners in said city, and the taxes levied thereon had been paid by the Coal Company to the Mayor and City Council of Baltimore, and it was agreed that all irregularities, if any, in any of the proceedings, including the assessment and levy of taxes on said stock should be waived, and that the sole matter to be determined by the Court was the construction and validity of said Act of 1900, as affecting the right of the respective claimants to receive the taxes for the year 1903 upon the shares of stock held by residents of Baltimore City. The right of appeal was reserved- to either party, and the decree being against the Mayor and City Council of Baltimore, this appeal has been brought. It cannot be questioned in this State that the Legislature has the power to fix the situs of the capital stock of a corporation for the purposes of taxation, unless restrained by some constitutional provision applying to the enactment drawn in question.

The first contention of the appellant is that the Act of 1900, according to the proper interpretation thereof, makes no change, so far as the situs of the stock for the purposes of taxation is concerned, in the general law of the State relating to the taxation of stock of corporations. If this position be correct, it will be unnecessary to consider the constitutional objections which would otherwise have to be decided, and we shall therefore consider at once the interpretation of the Act of 1900. The general law of the State referred to above, is found in ⁵ sections 2 and 141 of Art. 81 of the Code of Public General Laws of Maryland. Section 2 provides that “all shares or interest in any joint stock company * * * and all shares of stock in any corporation incorporated under the laws of the State, shall be valued and assessed for the purpose of State, county and municipal taxation, to the owners thereof in the county or city in this State, in which the said owners may respectively reside.” Section 141 of Art. 81, after providing how the State Tax Commissioner shall ascertain and determine the taxable value of shares of stock in corporations, provides that “the said taxable value of such respective shares of stock in such corporations or joint stock companies, owned by residents of this State, and taxable within this State, shall, for county and municipal purposes, be valued to the owners thereof in the county or city in this State in which such owners shall respectively reside; and the taxable value of such of said stock or shares as are held by non-residents of this State, shall for county and municipal purposes be valued to the owners thereof in the county or city in which said corporation or joint stock company is situated.” This section was construed in Hull v. Southern Development Company, 89 Md. 10 , where it was held that such tax was not due by the corporation, but by the individuals who own the stock, and that the corporation is made, for the sake of convenience, the agent of the State and county to collect the tax, and may charge it when paid to the account of such stockholders.

The appellant argues that the only change made in the general law by the Act of 1900, is that the holders of stock in corporations of Allegany County shall not be liable to taxation upon their stock, so that these corporations cannot under that Act, charge the taxes when paid to the account of such stockholders; but that the stock must still be valued and assessed to the owners in, and the taxes thereon be levied by, the county or city where the stockholders respectively reside, and must still be paid by the corporation, as heretofore, to such county or city, and not to Allegany County, except in ⁶ the case of stockholders residing there. But we cannot adopt this construction. The obvious purpose of this Act of 1900 was to give to Allegany County all the local taxes upon the assessed value of all the stock of its corporations, no matter where such stock was held and owned. And since it provides that none of the holders of such stock should be liable to taxation thereon, and that those corporations should pay all the taxes levied on the assessed value of their capital stocks, we think this Act, if valid, must be held by clear implication to repeal, as to corporations of Allegany County, the provisions of secs. 2 and 141 of Art. 81 of the Public General Code, as to the mode of assessing and levying the taxes on such stock, and that under this Act, if valid, the ascertained value of all such capital stock should have been assessed in Allegany County, not to the respective owners, as was done, but to the respective corporations, and that the taxes should have been levied accordingly against those corporations.

It would seem that it must have been the anticipation of - such a .possible-view which led counsel to insert in the agreed statement of facts, the clause which waives- “all irregularities,,if any, as to the form of the assessment and levy of taxes on said stock.” The Act of 1900 is an almost literal re-enactment of sec. 160 of Art. 1 of the Local Law of Allegany County, Code of i860, which was before this Court .in Alexander -V. Mayor and City Council of Baltimore, 53 Md. ibo, where it was said, “The effect- of this provision is to make the corporation liable to pay all the taxes which the stock in the hands of the -individual owners would be charged with; so that the State would get all its taxes at once, and Allegany County would get all the taxes which would otherwise be distributed ■among the various counties or cities where the stockholders lived.” The appellant contends that this is obiter dictiim, because, .it is said, the only question there before the Court, was whether' sec. 160 of Art. 1 of the Local Code had been repealed by the Act of- 1866, chap. 157, providing for the general valuation and assessment of property in the State, as the Court decided it was; while the appellees contend that in order ⁷ to determine whether there was such repeal, it was first necessary to determine the construction of the local law in order to ascertain whether there was such conflict as to work a repeal. We agree with the view of the appellees upon this point, and we also agree, as we have said, with the construction placed upon the local law in 53 Md., supra. When the Legislature in 1900, re-enacted this repealed local law, in the same words, it is presumed that they had in mind, and intended it to bear, the interpretation given to it by this Court in the case cited above which strengthens the conclusion we have reached in reconsidering its language. We come now to the consideration of the constitutional objections urged to this Act.

The first of these objections is that it is in violation of Art. 3, sec. 51, of the Constitution of Maryland which declares: “The personal property of residents in this State shall be subject to taxation in the county or city where the resident bona fide resides for the greater part of the year for which the tax may or shall be levied, and not elsewhere, except goods and chattels permanently located, which shall be taxed in the city or county where they are so located.” We have already said that while “the situs of property of this kind, for the purpose of taxation, is ordinarily at the domicile of the owner, the Legislature has the power to fix a different situs, provided of course, there be no conflict with some provisions in the Constitution.” Baldwin v. Washington County, 85 Md. 156 . As to stockholders non-residents of this State, and who are not embraced in the language of the above constitutional provision, the exercise of such power was upheld in Mayor and City Council of Baltimore v. Balt. City Passenger Railway, 57 Md. 35 , and in American Coal Company v. Co. Commrs. of Allegany County, 59 Md. 193 . In the latter case Judge Alvey said: “The American Coal Company is a Maryland corporation, deriving its existence and all its powers and franchises from this