Mayor of Baltimore v. Safe Deposit & Trust Co.

Schmucker, J., delivered the opinion of the Court. This appeal raises the question of the validity of the Act of 1902, ch. 486, which prescribes the method of assessment and taxation of personal property held in trust. The property involved in the present controversy consists of bonds of railroad and traction companies and stock of a railroad company chartered in Maryland, so that the precise issue now before us is that of the validity of the Act in so far as it relates to personal property of that character. The Act under consideration adds a new section to Art. 81 of the Code of Public General Laws title “Revenue and Taxes” to be designated as sec. 221 and to read as follows: 221. “All bonds, certificates of indebtedness, or evidence of debt, in whatsoever form, made or issued by any public or ⁶⁶¹ 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 busines 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.” Then follows a section repealing all inconsistent prior legislation.

It appears from the present record that the appellee, which is a corporation having its main office in Baltimore City, had in its possession $28,890 worth of railroad and other bonds in trust for Noah Walker, a resident of Baltimore County, and $22,930 worth of similar securities, including however 24 shares of stock of The Philadelphia, Wilmington and Baltimore Railroad Co., in trust for Emily R. Hoff, who is also a resident of Baltimore County. It is admitted that these securities were liable to assessment and taxation for the year 1903. The appellee, having been assessed on the tax books of Baltimore City for all of these securities, applied by petition to the Appeal Tax Court of that city to correct its assessment, by striking therefrom the securities, upon the ground that under the Act of 1902, ch. 486, it was required to pay the taxes on them for the year 1903 to the Collector of Taxes for Baltimore County where the equitable owners resided. The Appeal Tax Court rejected the application and refused to correct the assessment.

The trustee thereupon appealed ⁶⁶² under the statute, to the Baltimore City Court which relying upon the Act of 1902, passed its order of April 1st, 1903, from which the present appeal was taken, directing the Appeal lax Court to abate the assessed value of the securities from the trustee’s assessment list. It has long been settled that the power of taxation belongs exclusively to the legislative branch of the .government and that the Legislature, except as restricted by the Bill of Rights and Constitution, has the absolute power of taxation over all the property within the State. Faust v. Building Assn., 84 Md. 192 ; State v. Mayhew, 2 G. 487; State v. Sterling, 20 Md. 516—517; United States v. New Orleans, 98 U. S. 392 ; Merriweather v. Garrett, 102 U. S. 472 ; Savings Society v. Multenomah Co., 169 U. S. 421 . The Court has also repeatedly recognized and upheld the power of the Legislature to fix the situs of personal property for purposes of assessment and taxation.

M. & C. C. of Balto. v. Balto. City Pass. R. Co., 57 Md. 31 ; Am. Coal Co. v. County Commrs. of Allegany Co., 59 Md. 185 ; Baldwin v. Washington Co., 8 5 Md. 157 ; Corry v. M. & C. C. of Balto., 96 Md. 320, 321 .

As the Act of 1902 specifically fixes the situs for purposes of taxation of personal property held in trust at the residence of the beneficial owner, the order appealed from was properly passed unless the Act is to be regarded as in conflict with some of the provisions of the Bill of Rights or the Constitution. The appellant contends that it does conflict with Art. 15 of the Bill of Rights, which declares that every person “ holding property” in this State ought to contribute his proportion of taxes, and they rely upon the case of Latrobe, v. Baltimore, 19 Md. 13 , as deciding that the holder of property there referred to is the holder of its legal title and not the owner of the beneficial interest in it. They also rely upon sec. 51 of Art. 3 of the Constitution, which provides that “ personal property of residents in this State shall be subject to taxation where the resident bona fide resides for the greater part of the year,” as requiring all personal property, except ⁶⁶³ those classes of it which are