Pittman v. Home Owners' Loan Corp.

Urner, J., delivered the opinion of the Court. In 1937, the General Assembly, by chapter 11 of the Acts of its Special Session of that year, added to article 81 of the Code, entitled “Revenue and Taxes,” two sections, .213 and 214, under the sub-title “Tax on the Recordation of Instruments in Writing.” Section 213 provides: “A tax is hereby imposed upon every instrument of writing recorded or offered for record with the Clerks of the Circuit Courts of the respective Counties, or the Clerk of the Superior Court of Baltimore City, on and after June 1st, 1937, to and including September 30th, 1939, including mechanics liens, deeds, mortgages (except purchase money mortgages), chattel mortgages, bills of sale, conditional contracts of sale, leases, confessed judgments, magistrates’ judgments, crop liens, deeds ⁵¹⁴ of trust, and any and all other instruments of writing, so recorded or offered for record, which create liens or incumbrances on real or personal property, or convey title to real or personal property; provided, however, that said tax shall not apply to assignments of mortgages, purchase money mortgages, absolute or partial releases, or orders of satisfaction. “The tax hereby imposed shall be at the rate of 10c for each $100, or fractional part thereof, of the actual consideration paid or to be paid, for the property transferred, in the case of instruments conveying title, and at the rate of 10c for each $100, or fractional part thereof, of the principal amount of the debt secured, in the case of instruments securing a debt, or reserving title as security for a debt. , “In addition to the tax hereby imposed, the Clerks shall collect a change of 50c for each such instrument recorded or offered for record.” . Included in section 214 are these provisions: “No such instrument shall be received for record by any Clerk of the Court unless and until a stamp is affixed to said instrument and canceled. * * * It shall be unlawful for any person to record any written instrument referred to in this sub-title without having provided for the payment of the tax and recordation charge as herein provided, and it shall be unlawful for any person to misrepresent the amount of the actual consideration in any such transaction.” The Act of Congress creating the Home Owners’ Loan Corporation, June 13th, 1933, ch. 64, sec. 1 et seq., 48 Stat. 128 , 12 U. S. Code Ann. ch. 12, secs. 1461-1468, contains the following tax exemption clauses: “The bonds issued by the Corporation under this subsection shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States or any District, Territory, dependency, or possession thereof, or by any State, county, municipality or local taxing authority. The Corporation including its franchise, its capital, reserves and surplus, and its loans and income, shall like ⁵¹⁵ wise be exempt from such taxation; except that any real property of the Corporation shall be subject to taxation to the same extent, according to its value, as other real property is taxed.” A duly executed mortgage to the Home Owners’ Loan Corporation on property in Baltimore City was presented By the corporation to the Clerk of the Superior Court for the purpose of having it recorded among the land records of the City, but the clerk refused to receive and record the mortgage because the corporation declined to pay the recordation tax and charge imposed by the Act of 1937, in addition to the sum of $2.50 specified by the clerk as properly payable for recording the instrument.

The amount of the recording cost was tendered by the corporation, but it claimed immunity from the recordation tax charges by virtue of the quoted exemption clause of the federal statute and because of its character and functions as a governmental agency. The recording of the mortgage being necessary under the Maryland law for the adequate protection of the mortgagee’s interest, the Home Owners’ Loan Corporation petitioned the lower court for the writ of mandamus to compel the clerk to record the instrument upon payment of the ordinary legal fee for such service. A demurrer by the clerk to the petition having been overruled, with leave to answer, but that method of defense not having been .utilized, the court ordered that the writ of mandamus sued for be issued. This appeal has resulted.

In our opinion the order below was justified, and its affirmance is required, by the decision of the Supreme Court in the case of Federal Land Bank v. Crosland, 261 U. S. 374 , 43 S. Ct. 385 , 67 L. Ed. 703 . That decision reversed a decree of the Supreme Court of Alabama which refused to order the recording officer of Montgomery County to record a mortgage on receiving the usual recording fee, but without payment of an additional sum as a recordation tax. In the opinion of the United States Supreme Court, as delivered by Mr. Justice Holmes, the case was stated and discussed, in part, as follows: “The General Revenue Act of the State, approved Sep ⁵¹⁶ tember 15, 1919 (Acts Ala. 1919, p. 420), by section 361, Schedule 71 provides that no mortgage shall be received for record — ‘unless the following privilege or license taxes shall have been paid upon such instrument before the same shall be offered for record, to wit: * * * Upon all instruments which shall be executed to secure an indebtedness of more than one hundred dollars there shall be paid the sum of fifteen cents for each one hundred dollars of such indebtedness, or fraction thereof, which is secured by said mortgage * * * to be paid for by the lender, and no such paper shall be received for