Mayor of Baltimore v. Home Credit Co.

Pattison, J., delivered the opinion of the Court. This appeal is from a judgment recovered by the appellee, the Home Credit Company, against the Mayor and City Council of Baltimore, the appellant, for money alleged to have been erroneously and mistakenly paid to the appellant as taxes for the years 1930, 1931, and 1932. The case was tried by the court sitting without a jury. The verdict was for the plaintiff for the sum of $1,783.02, and a judgment for that amount was entered thereon in favor of the plaintiff.

The appeal in this case was taken from that judgment. In the trial of the case three exceptions were taken to the rulings of the court upon the evidence and one upon its rulings on the prayers. The plaintiff offered two prayers, both of which were granted; and the defendant offered seven, all of which were refused except his last or seventh prayer. ⁵⁹ As shown by agreed statement of facts appearing’ in the record, “the Home Credit Company * * * is a corporation duly incorporated under the laws of the State of Delaware, with its principal office and place of business in the City of Baltimore, State of Maryland, where it is engaged in the purchasing and discounting of promissory notes and transacting a general finance business. “On August 19th, 1927, the Home Credit Company * * * filed with the Appeal Tax Court of the Mayor and City Council of Baltimore its ‘Schedule and Return to the Appeal Tax Court of Tangible and Intangible Personal Property Located in the City of Baltimore Owned by Foreign Finance Corporations.’ * * * The printed form of said ‘Schedule and Return’ was prepared by the Mayor and City Council of Baltimore * * but was completed and filled in by the Home Credit Company. * * * Upon this return the Appeal Tax Court valued the property returned therein and made an assessment for purposes of taxation for 1928 and subsequent years against the Home Credit Company * * * on September 20th, 1927, the assessment being * * * on intangible personal property of $42,890.00, which assessment was continued from year to year thereafter. This intangible personal property assessment of $42,890.00 was computed only from the value stated by the Home Credit Comp'any in the ‘Schedule and Return,’ under the caption of ‘Rotes on Loans.’ Rotice of said assessment was duly given and no protest filed thereto, and taxes for the years 1928 and 1929 were paid thereon by the Home Credit Company. * * * On the * * * intangible personal property assessment of $42,890.00 taxes were levied for the year 1930 by the Mayor and City Council of Baltimore for State and City purposes by virtue of Ordinance Ros. 876 and 875, respectively. * * * “The Home Credit Company * * * paid taxes so assessed and levied for the year 1930 * * * amounting to $191.72, of which amount * * * $127.38 was paid * * * for City taxes, and * * * $64.34 was paid * * * for State taxes” and “turned over to the Treasurer of the State of Maryland. * * * ⁶⁰ “On.

August 25th, 1930, the Home Credit Company * * * filed with the Appeal Tax Court * * * another ‘Schedule and Return to the Appeal Tax Court of Tangible and Intangible Personal Property Located in the City of Baltimore Owned by Foreign Finance Corporations,’ this Schedule and Return superseding its Schedule and Return filed on August 19th, 1927. * * * The printed form of said ‘Schedule and Return’ (like the first) was prepared by the Mayor and City Council of Baltimore * * * but was completed and filled in by the Home Credit Company. * * * Hpon this return the Appeal Tax Court valued the property returned therein and made an assessment for purposes of taxation for the year 1931 and subsequent years against the Home Credit Company * * * on October 4th, 1930, the assessment being * * * on intangible personal property of $1,102,754.17. Hotice of said assessment was duly given, upon receipt of which * * * the Home Credit Company * * * protested said assessment. Ho hearing was had upon the protest, but by agreement with * * * the Home Credit Company * * * the Appeal Tax Court reduced said assessment * * * to $275,940.00 on October 21st, 1930. This * * * assessment of $275,940.00 was computed only from the value stated by the Home Credit Company in the ‘Schedule and Return,’ under the caption of ‘Loans on Hotes.’ Hotice of this assessment * * * $275,940.00 on intangible personal property, was duly given and no protest filed thereto.

On the * * * intangible personal property assessment of $275,940.00 taxes were levied for the year 1931 by the Mayor and City Council of Baltimore for State and City purposes by virtue of Ordinances Hos. 1211 and 1213, respectively. * * * “The Home Credit Company * * * paid taxes so assessed and levied for the year 1931 * * * amounting to $1,241.74, of whioh amount * * * on August 31st, 1931, the sum of $699.15 was paid * * * for City taxes and * * * $349.58 * * * for State taxes” and “turned over to the Treasurer of the State of Maryland * * * of which amount * * * the sum of $128.67 was paid * * * for City taxes, and * * * ⁶¹ $64.34 * * * for State taxes” and “turned over to the Treasurer of the State of Maryland. * * * “The assessment * * * on intangible personal property of $275,940.00, made by the Appeal Tax Court of the Mayor and City Council of Baltimore on October 21st, 1930, was continued for the year 1932. On the * * * assessment of $275,940.00 taxes were levied for the year 1932 by the Mayor and City Council of Baltimore for State and City purposes by virtue of Ordinance Hos. 94 and 90, respectively. * * * “The Home Credit Company * * * paid taxes so assessed and levied for the year 1932 on August 30th, 1932 * * * amounting to $1,241.73, of which amount * * * $827.82 was paid * * * for City taxes, and * * * $413.91 * * * for State taxes,” and “turned over to the Treasurer of the State of Maryland. * * * “Therefore, the Home Credit Company * * * has paid to the Mayor and City Council of Baltimore the following sums of money for taxes assessed on intangible personal property as aforesaid: Por the Year State Taxes City Taxes 1930 ............ $ 64.34 $ 127.38 1931 ............ $413.92 $ 827.82 1932 ............ $413.91 $ 827.82 Total........ $892.17 $1,783.02 “and has demanded from the Mayor and City Council of Baltimore * * * the return of said money paid as aforesaid as a refund of taxes under and by virtue of chapter 226 of the Acts of 1929 of the General Assembly of Maryland, codified in the 1929 Supplement to the Maryland Code, article 81, Section 153.” The two schedules and returns mentioned in the agreed statement of facts were filed in evidence. These schedules are inquisitorial in their nature. In them are inserted different kinds of property; for example, under the head of intangible property they have “Mortgages on Real Prop ⁶² erty,” “Chattel Mortgages,” “Rotes on Loans,” “Securities (Shares of Stocks and Bonds).” Following each of these items is a blank space in which the taxpayer is expected to write his answer thereto, stating if he has any such property and, if so, the amount or extent of it.

In addition to the facts contained in the stipulation above set out and the contents of the schedule and return, the record contains the further evidence as to the character of the “Rotes on Loans,” and the reasons why the tax thereon was paid without protest or appeal. The president, treasurer, and assistant treasurer of the appellee company each swore that these notes were made by individuals and not by corporations, and that the company held no bonds or certificates of indebtedness of any kind of any corporation. The president, Joseph T. Polk, testified further that the company did not protest against the payment of taxes on these notes, as it was thought by its officials, at the time of the payment of the taxes, and for a long time thereafter, that notes signed by individuals were under the law subject to assessment and taxation. The three exceptions to the testimony were taken to the court’s ruling in admitting the evidence of these witnesses.

The court, sitting as a jury, was told by the plaintiff’s first prayer, which was granted, that should it find from the evidence “that the plaintiff paid to the defendant monies as an intangible property tax, for the years 1930, 1931 and 1932, and that said tax was based on an assessment of notes, then if the court * * * shall further find that all of said notes were in fact signed or issued by individuals, and shall further find that said monies were paid under a belief by the plaintiff that the same were legally due and owing, the verdict of the court, sitting as a jury, must be for the plaintiff.” The plaintiff’s second prayer, a damage prayer, is consistent with the defendant’s seventh prayer, and no objection is urged against it. The defendant’s first and second prayers asked for a directed verdict for the defendant, the first upon the general ⁶³ assertion that there was no evidence in the case legally sufficient to entitle the plaintiff to recover, and the second that under the evidence the plaintiff was not entitled to recover “by virtue of article 81, sec. 153 of the 1929 Supplement to the Annotated Code.” By the defendant’s third prayer the court, sitting as a jury, was told that should it find that the “taxes were levied upon assessments made by the Appeal Tax Court * * * from information given the said Appeal Tax Court by * * * the plaintiff, of which assessments the plaintiff was given notice,” and the latter “failed to protest or appeal within the time prescribed and in the manner provided by law, and that such action or failure to* act on the part of the plaintiff was a waiver of any right the plaintiff may have to maintain this suit, and, therefore, the verdict must be for the defendant.” The defendant’s fourth prayer required the court to find in somewhat greater detail the facts that were to be found in the third prayer, including the notice by the defendant to the plaintiff of the assessments made by the appeal tax court, and concluded by saying: “And the plaintiff failed to protest said assessments or appeal therefrom within the time prescribed and in the manner provided by law, then the verdict must be for the defendant.” The defendant’s fifth prayer was like the fourth, with the following words added thereto: “Even though the Court shall also find that the assessments made by the Appeal Tax Court of the Mayor and City Council of Baltimore aforementioned were so made by the said Appeal Tax Court upon notes on loans of individuals.” The defendant’s sixth prayer asked that the court rule that the “notes on loans referred to in the evidence in the case are certificates of indebtedness subject to valuation and assessment to the owner thereof.” These prayers present the following questions: (1) Were the notes mentioned, signed or issued by individuals, liable to assessment for the purpose of an intangible property tax pursuant to chapter 226, section 6, subsection 3, of the Acts of 1929, now codified in article 81, sec. 6, subsec. 3, of the 1929 Supplement to the Code? and (2) Was the failure of ⁶⁴ the appellee to protest or appeal from the assessment after notice to it of the assessment, a waiver of any right the plaintiff may have to maintain this suit; or, if not a waiver, did its failure to protest or appeal within the time prescribed and in the manner provided by law defeat its right to recover the taxes paid on notes signed by individuals, if erroneously paid ? Eirst. In subsection 3 of section 6 of article 81 of the Code, under the heading, “What Shall Be Taxed and Where,” are included: “All interest-bearing bonds, certificates of indebtedness or evidences of debt, owned by residents of the State, in whatsoever form made or issued by any public or private domestic corporation (other than a county or city of this State), or made or issued by any State (other than this State),